Who: The Committee of Advertising Practice (CAP) and the Advertising Standards Authority (ASA)
Where: United Kingdom
When: 11 December 2025
Law stated as at: 10 February 2026
What happened
CAP has published guidance on the presentation of VAT in ads, accompanied by a self-help tool to assist businesses in determining whether prices need to be displayed inclusive of VAT or not.
Following the coming into force of the unfair commercial practices regime under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) in April 2025, the Competition and Markets Authority (CMA) published guidance on price transparency, addressing the presentation of specific charges in headline prices, including taxes such as VAT. CAP has said that existing ASA rulings on VAT, while predating the DMCCA, appear to be aligned with the CMA guidance. In the new guidance, CAP has set out how, in practice, advertisers should present VAT in their price claims.
Rule 3.18 of the UK Code of Non-broadcast Advertising and Direct and Promotional Marketing (CAP Code) states that “quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable”.
When customers are consumers
Since consumers ordinarily pay VAT and cannot recover it, advertisers should use VAT-inclusive prices, even where some consumers may be exempt from paying VAT for particular products.
If an ad is clearly addressed only to consumers who do not pay – or can recover – VAT, it is likely to be acceptable to state VAT-exclusive pricing provided a prominent statement of the amount or rate of VAT payable is included. A relevant example, which the ASA has previously ruled on, is an ad for a mobility scooter where VAT relief was available to those with a long-term illness or disability, and the ad included a prominent statement that made these circumstances clear.
When customers are businesses
For ads where the audience consists entirely of businesses, VAT-exclusive prices can be shown provided it is made clear in the ad that the price is exclusive of VAT and to whom it applies.
The intended audience may be evident from the name of the website or the placement of the ad. If this is not clear, marketers should clarify the intended audience, such as by prominently stating that the price is a “trade price” or “business price”.
When customers are a mixture of consumers and businesses
Where customers comprise both businesses and consumers, VAT-inclusive prices should be stated.
Ads may also state VAT-exclusive prices, but marketers should ensure that a VAT-inclusive price is given at least equal prominence to the VAT-exclusive price. If both VAT-inclusive and VAT-exclusive prices are stated, the VAT-exclusive prices should be clearly addressed to those who pay no VAT or can recover VAT, and should be accompanied by a prominent statement of the amount or rate of VAT payable (for example, “Trade Price £X excl.VAT@20%”). Phrases such as “ex. VAT” and “inc. VAT” will not qualify.
Prices in sponsored search results
The ASA has ruled that it was acceptable to use VAT-exclusive prices in sponsored search results where the majority of customers are businesses. However, advertisers should take care to clearly address those price claims to those who pay no VAT or can recover VAT, for example by stating “business price” or “trade price”.
Why this matters
The guidance is underpinned by numerous ASA rulings against businesses across sectors. Businesses serving both consumers and business customers should exercise particular caution around VAT pricing and may wish to utilise the CAP self-help tool to assist with compliance. One potential compliance approach, highlighted in the guidance, is to determine customer type prior to providing any prices and then ensure that only the appropriate pricing format is shown to each audience.
Advertisers should also bear in mind the wider price transparency rules under the DMCCA, which require that other mandatory charges be included in headline prices.
