Fridaysmove have recently altered their HIP fee to £95 inclusive of VAT. This follows on from discussions with the Advertising Standards Authority (ASA) concerning breaches in HIP costs being advertised without specifying the VAT element. However, other HIP providers have not acted on this and, currently, only two out of seven HIP providers advertising on Google disclose VAT.
The ASA investigates complaints to ensure that non-broadcast marketing communications comply with the British Code of Advertising, Sales Promotion and Direct Marketing (the CAP Code), prepared by the Committee of Advertising Practice (CAP). They also investigate complaints to ensure that TV and radio advertising complies with the CAP (Broadcast) Codes. The Government, Office of Fair Trading and the Courts recognise the ASA as the “established means” of regulating non-broadcast advertising.
HIP providers who fail to quote the VAT element or do not make their quote VAT inclusive may well be in breach of the CAP Code. The following are the most relevant clauses:
7. 1 No marketing communication should mislead, or be likely to mislead, by inaccuracy, ambiguity, exaggeration, omission or otherwise.
7. 2 Marketing communications must not omit, hide or provide in an unclear, unintelligible, ambiguous or untimely manner material information if that omission or presentation is likely to affect consumers decisions about whether and how to buy the advertised product, unless the information is obvious from the context. If the advertisement is limited by time or space, the ASA will take into account steps that the advertiser has taken to make that information available to consumers by other means.
For marketing communications that quote prices for advertised products, material information includes:
a) the main characteristics of the product
b) the identity ( e.g. trading name) and geographical address of the marketer and any other trader on whose behalf the advertiser is acting
c) the price of the advertised product, including taxes; or where the nature of the product is such that the price cannot be calculated in advance, the manner in which the price is calculated
d) delivery charges
e) the arrangement for payment, delivery, performance or complaint handling, if those differ from the arrangements that consumers are likely to reasonably expect
f) that consumers have the right to withdraw or cancel, if they have that right (see 42. 2(f)).
15. 2 Prices quoted in marketing communications addressed to the public should include VAT and other non-optional taxes and duties imposed on all buyers. In some circumstances, for example where marketing communications are likely to be read mainly by businesses able to recover VAT, prices may be quoted exclusive of VAT or other taxes and duties, provided prominence is given to the amount or rate of any additional costs.
The ASA are particularly focused on Google advertising. Therefore, HIP companies advertising on Google should beware of potential action.