Compulsory costs and charges: General

Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.

Also known as: fees, charges, delivery, VAT-inclusive, credit card, pricing

Non-optional charges

Rule 3.18 of the CAP Code states that quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers (The Diesel Car Company, 27 September 2023 and Rentalcars.com, 13 March 2019).

If it is not possible to calculate the tax, duty, fee or charge in advance, for example because it depends on the consumer’s circumstances, the advertisement must make clear that the charge is excluded from the advertised price and state how it will be calculated (Rule 3.19).

If a charge is genuinely optional, this does not need to be included in price. However, if excluding a fee from the price, advertisers should be able to demonstrate to the ASA that it was genuinely optional ( Sunshine Cruise Holidays Ltd, 26 February 2020).

One-off charges

One-off and periodic charges may be presented separately from the main price statement, but the type and amount of these costs must be made clear to consumers.

In 2020, complainants said certain Sky ads did not make clear that a set-up fee of £199 applied to existing customers without a Sky Q box. The ASA ruled that because the set-up fees differed depending on the status of the customer (i.e. new or existing), the information needed to be presented clearly to help viewers understand the full costs applicable to them. The ASA decided the set-up fees were material information, which meant the fees should have been stated in the main text so consumers were clear on the costs applicable to them. Given the unclear way the information about the additional charge was set out, and the fact the information was not sufficiently prominent, it was deemed contrary to the CAP Code (Sky UK Ltd,12 August 2020).

VAT

VAT must be included in any quoted price, unless 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 (Rule 3.18).

If a product or service is available to both customers who pay VAT and those who do not, VAT-inclusive prices should be stated (Lifeline24 Ltd, 13 February 2019). In those circumstances, advertisers may place VAT-exclusive prices in the ad as well, but the VAT-inclusive price must be given at least equal prominence to the VAT-exclusive price.

For detailed guidance see ‘Compulsory costs and charges: VAT’.

Delivery fees

Marketing communications that state prices must also state applicable delivery, freight, or postal charges. If it is not possible to calculate the delivery charge in advance, for example, because it depends on the number of items ordered or the customer’s location, the ad must state that these charges are payable (Rule 3.20).

For detailed guidance see ‘Compulsory costs and charges: delivery fees’.