Changes to digital advertising VAT rates for charities
Below is a summary of the applicable VAT rates as they stand following those changes. The items listed in bold indicate a change in the rate was made. We hope you will find this a useful reference resource.
VAT rates for digital advertising:
The tables below show the VAT rate previously advised by HMRC and the new revised VAT rate.
|Advertising Type||Description||Previously Advised VAT Rate||Updated VAT Rate|
|Pay per Click adverts||These are advertisements and not involving selection on address.||Zero rate||Zero rate|
|Natural Hits||Not supplies of advertising.||Standard rate||Standard rate|
|Direct placements on third party websites||These are advertisements and not involving selection on address.||Zero rate||Zero rate|
|Social media||Advertising is specifically targeted at the individual.||Standard rate||Standard rate|
|Retargeting individuals revisiting a website||The IP address of the individual is recorded and advertising is presented based on the users prior searches.||Standard rate||Zero rate|
Other targeted advertising:
|Channel targeting||A particular section/page of a website used to advertise.||Zero rate||Zero rate|
|Content targeting||Adverts displayed alongside related content.||Zero rate||Zero rate|
|Behavioural targeting||Similar to retargeting – adverts displayed based on prior websites visited based on IP address.||Standard rate||Zero rate|
|Demographic targeting||Using sources of data on the targeted individual to base the advertisements on.||Standard rate||Zero rate|
|Audience targeting||Similar use of information as demographic targeting but on a group of individuals. This will still be based on their IP addresses and direct contact.||Standard rate||Zero rate|
|Location targeting||IP addresses used to target individuals in a particular area.||Standard rate||Zero rate|
|Lookalike targeting||Cookies used to identify potential new customers by reviewing current customers, advertiser then directly targets the potential new clients.||Standard rate||Zero rate|
|Device targeting||Example is an advertiser choosing certain devices to advertise to, not targeting specific individuals.||Zero rate||Zero rate|
|Daypart targeting||Advertising at specific times of day or specific days of the week. Not a targeted selection of individuals.||Zero rate||Zero rate|
Further guidance on these VAT rates can be found on the Gov.uk website.