Charities are being invited to help build the case for reform of VAT rules on social media advertising.
Charity Tax Group (CTG) has launched a sector-wide survey on the topic after the issue was raised twice in parliament and Treasury ministers called for further evidence.
“Charities are increasingly operating in a digital first world, and social media is often one of the most effective ways to reach vulnerable people, engage supporters and raise awareness of important issues,” said Luke Hall, chief executive of CTG.
“Yet social media advertising continues to attract VAT, creating additional costs that reduce the resources available for charitable purposes.
“As more charities shift their advertising activity online, we need to better understand the scale and impact of these costs across the sector.
“The evidence gathered through this survey will play an important role in informing our ongoing discussions with HM Treasury, HMRC and parliament.”
CTG has been raising the issue with ministers, MPs and policymakers in recent months and said it would use the survey findings to strengthen its engagement as it continues to make the case for reform.
In 2020, following a campaign by CTG, HMRC zero-rated VAT for charities on most forms of digital advertising. However, it remained due on social media advertising.
According to CTG, a “growing proportion” of charities’ advertising budgets are now directed towards social media and the VAT costs are “becoming increasingly significant and directly affecting the impact of their campaigns”.
The survey will remain open until the end of August.
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