HMRC: Charity tax relief does not apply to social media advertising

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3 June, 2019


HM Revenue & Customs (HMRC) is reminding charities that VAT relief is not applied to social media advertising.

In a letter to charities the authority outlines the rules on various forms of digital advertising in order to address common errors.

According to the letter, relief is only available for advertising that is communicated to the general public; social media advertising is often targeted at selected individuals or groups and so does not qualify.

Last month, the Charity Tax Group said that a tax on social media adverts could cost charities millions and said it is seeking legal advice to challenge HMRC’s position.

HMRC recommends that organisations which supply or have been supplied with electronic advertising on social media check that they have correctly accounted for any VAT due under the reverse charge mechanism.

Guidance is available on how to correct errors, should one be found:

https: // men t/pu bl ications/vat-notice-70045-how-to-correct-va t-e rrors-a ndm ake-adj u stm ents-or-clai ms/vat-notice-70045-how-to-correct-vat-erro rs-ancl-m akeadjustments-or-claims

More information regarding the charity VAT relief for advertising can be found in VAT public notice 701/58 Goods or Services Supplied to Charities:

https ://www. g av. uk/g uid an ce/vat-when-you-su pply-services-or-q oocls-to-cl1arities-noti ce70158

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