Don’t Forget Your VAT
The Committee of Advertising Practice has published new guidance on the publication of VAT in adverts and paperwork by estate and letting agents.
It is common practice within the industry not to include VAT in figures, especially in percentage commissions on sale or letting charged to vendors and landlords. However, this position was criticised by the Advertising Standards Authority in a ruling issued at the end of last year.
The CAP guidance is clear that all figures being quoted, whether percentages or fixed figures should be quoted including VAT where this can be calculated. This means percentage commissions need to be recalculated so as to include the VAT percentage as well.
In fact the requirement to quote fees inclusive of VAT is arguably already in existence under the Consumer Protection From Unfair Trading Regulations and also in the new Consumer Rights Act 2015. However, this reinforces the point.
Agents should act promptly to amend the websites and terms of business as well as other advertising if they wish to avoid fines.