VAT inclusive prices when selling to the public. ASA ruling.

Discussion in 'UK VOIP' started by Harry Stottle, Dec 31, 2006.

  1. There have been several discussions in various newsgroups recently about
    if companies are obliged to quote VAT inclusive prices when advertising
    goods or items for sale to the general public. The main objectors
    against quoting VAT inclusive prices have been companies that sell to
    other companies, but who also sell to the general public, and their
    argument was that because they do not have to quote VAT inclusive prices
    when selling to other companies, this somehow excuses them from quoting
    VAT inclusive prices if they also sell to the general public.

    The ASA (Advertising Standard Agency) has recently ruled that Dell
    Computers misled customers when advertising items to the general public,
    the ASA stated that when advertising good to the general public, VAT
    inclusive prices must be quoted, and these VAT inclusive prices must be
    at least as prominent as the VAT exclusive price if the VAT exclusive
    price is used, in other words, the VAT inclusive price must be stated
    alongside the VAT exclusive price, and the type face used must be at
    least as large and as clear as the VAT exclusive price.

    Below is a quote from the article in PCPro magazine, the links to the
    article and the ASA ruling are given below the quote, so please, if you
    are a business, and selling goods or items to the general public, as
    well as to other companies, lets have VAT inclusive prices quoted in
    your adverts, and stop trying to hide behind the mistaken belief that
    you do not have to comply with the law on quoting VAT inclusive prices
    in your adverts.

    <Quote> 'We nevertheless considered that, because the insert targeted
    both the general public and businesses, the VAT-inclusive prices should
    have been given at least equal prominence to the VAT-exclusive prices.
    We also considered that, because the desktops could be of interest to
    non-business users who would be unable to get a desktop for £199, the
    approach of using a "from" price excluding VAT was misleading. '

    ASA told Dell to take greater care in future. Specifically, it should
    'avoid errors that could lead to consumer disappointment'. The
    organisation also told Dell to ensure that VAT-inclusive and
    VAT-exclusive prices were quoted with equal prominence in adverts with a
    general readership. </Quote>

    http://www.pcpro.co.uk:80/news/99545/dell-misled-customers-says-asa.html

    http://www.asa.org.uk/asa/adjudications/Public/TF_ADJ_42026.htm
    Harry Stottle, Dec 31, 2006
    #1
    1. Advertising

  2. Harry Stottle

    A C Guest

    Although our eBay listings inc VAT, the ASA ruling will not affect eBay,
    unless eBay changed the policy on VAT & make sellers either list with VAT
    inc or to show the correct price within the listing & not just "17.5% VAT
    will be added to the final price".

    It should be standard practice everywhere to quote the full price inc VAT
    rather than the exc VAT price, which is normally shown as buy x from £xxxx
    to mislead customer thinking its a good deal only to add 17.5% to the final
    price.

    --

    A C

    http://AbbeyCross.co.uk

    Delete REMOVE to Reply
    A C, Dec 31, 2006
    #2
    1. Advertising

  3. Harry Stottle

    Raj Guest

    "Harry Stottle" <> wrote in message
    news:45978f8a$0$97274$...
    > There have been several discussions in various newsgroups recently about
    > if companies are obliged to quote VAT inclusive prices when advertising
    > goods or items for sale to the general public. The main objectors
    > against quoting VAT inclusive prices have been companies that sell to
    > other companies, but who also sell to the general public, and their
    > argument was that because they do not have to quote VAT inclusive prices
    > when selling to other companies, this somehow excuses them from quoting
    > VAT inclusive prices if they also sell to the general public.
    >
    > The ASA (Advertising Standard Agency) has recently ruled that Dell
    > Computers misled customers when advertising items to the general public,
    > the ASA stated that when advertising good to the general public, VAT
    > inclusive prices must be quoted, and these VAT inclusive prices must be
    > at least as prominent as the VAT exclusive price if the VAT exclusive
    > price is used, in other words, the VAT inclusive price must be stated
    > alongside the VAT exclusive price, and the type face used must be at
    > least as large and as clear as the VAT exclusive price.
    >
    > Below is a quote from the article in PCPro magazine, the links to the
    > article and the ASA ruling are given below the quote, so please, if you
    > are a business, and selling goods or items to the general public, as
    > well as to other companies, lets have VAT inclusive prices quoted in
    > your adverts, and stop trying to hide behind the mistaken belief that
    > you do not have to comply with the law on quoting VAT inclusive prices
    > in your adverts.
    >
    > <Quote> 'We nevertheless considered that, because the insert targeted
    > both the general public and businesses, the VAT-inclusive prices should
    > have been given at least equal prominence to the VAT-exclusive prices.
    > We also considered that, because the desktops could be of interest to
    > non-business users who would be unable to get a desktop for £199, the
    > approach of using a "from" price excluding VAT was misleading. '
    >
    > ASA told Dell to take greater care in future. Specifically, it should
    > 'avoid errors that could lead to consumer disappointment'. The
    > organisation also told Dell to ensure that VAT-inclusive and
    > VAT-exclusive prices were quoted with equal prominence in adverts with a
    > general readership. </Quote>
    >
    > http://www.pcpro.co.uk:80/news/99545/dell-misled-customers-says-asa.html
    >
    > http://www.asa.org.uk/asa/adjudications/Public/TF_ADJ_42026.htm
    >
    >
    >



    Thanks for information.
    It will be fair on customers if both prices are displayed in same size.

    Question: Will E bay enforce this as well?


    Raj Kundra
    Kundra Computers
    Raj, Dec 31, 2006
    #3
  4. "Raj" <raj@(remove...)kundracomputers.co.uk> wrote in message
    news:5DMlh.204075$...
    >
    > "Harry Stottle" <> wrote in message
    > news:45978f8a$0$97274$...
    >> There have been several discussions in various newsgroups recently
    >> about
    >> if companies are obliged to quote VAT inclusive prices when
    >> advertising
    >> goods or items for sale to the general public. The main objectors
    >> against quoting VAT inclusive prices have been companies that sell to
    >> other companies, but who also sell to the general public, and their
    >> argument was that because they do not have to quote VAT inclusive
    >> prices
    >> when selling to other companies, this somehow excuses them from
    >> quoting
    >> VAT inclusive prices if they also sell to the general public.
    >>
    >> The ASA (Advertising Standard Agency) has recently ruled that Dell
    >> Computers misled customers when advertising items to the general
    >> public,
    >> the ASA stated that when advertising good to the general public, VAT
    >> inclusive prices must be quoted, and these VAT inclusive prices must
    >> be
    >> at least as prominent as the VAT exclusive price if the VAT exclusive
    >> price is used, in other words, the VAT inclusive price must be stated
    >> alongside the VAT exclusive price, and the type face used must be at
    >> least as large and as clear as the VAT exclusive price.
    >>
    >> Below is a quote from the article in PCPro magazine, the links to the
    >> article and the ASA ruling are given below the quote, so please, if
    >> you
    >> are a business, and selling goods or items to the general public, as
    >> well as to other companies, lets have VAT inclusive prices quoted in
    >> your adverts, and stop trying to hide behind the mistaken belief that
    >> you do not have to comply with the law on quoting VAT inclusive
    >> prices
    >> in your adverts.
    >>
    >> <Quote> 'We nevertheless considered that, because the insert targeted
    >> both the general public and businesses, the VAT-inclusive prices
    >> should
    >> have been given at least equal prominence to the VAT-exclusive
    >> prices.
    >> We also considered that, because the desktops could be of interest to
    >> non-business users who would be unable to get a desktop for £199, the
    >> approach of using a "from" price excluding VAT was misleading. '
    >>
    >> ASA told Dell to take greater care in future. Specifically, it should
    >> 'avoid errors that could lead to consumer disappointment'. The
    >> organisation also told Dell to ensure that VAT-inclusive and
    >> VAT-exclusive prices were quoted with equal prominence in adverts
    >> with a
    >> general readership. </Quote>
    >>
    >> http://www.pcpro.co.uk:80/news/99545/dell-misled-customers-says-asa.html
    >>
    >> http://www.asa.org.uk/asa/adjudications/Public/TF_ADJ_42026.htm
    >>

    >
    > Thanks for information.
    > It will be fair on customers if both prices are displayed in same
    > size.
    >
    > Question: Will E bay enforce this as well?
    >


    This law has been in existence for several years, but it has been hard
    to define previously because of the legal jargon used in official
    documentation. The ruling by the ASA, against a high profile company,
    has now made it much clearer, and hopefully, companies will act on it as
    soon as possible to avoid being reported to the ASA themselves. I cannot
    see any justification for quoting VAT exclusive prices for goods or
    items offered for sale to the general public, other than to mislead, and
    any company doing this needs reporting.

    Regarding eBay, perhaps someone should send a copy of the ruling to
    them, it is probably their responsibility to remove any advertisement
    which doesn't comply with the ASA ruling, and eBay should enforce it.
    Harry Stottle, Dec 31, 2006
    #4
  5. Harry Stottle

    Bargepole Guest

    On Sun, 31 Dec 2006 10:51:45 GMT, "Raj"
    <raj@(remove...)kundracomputers.co.uk> wrote:

    >Question: Will E bay enforce this as well?


    Cheatbay doesn'r enforce anything. I wouldn't touch them...
    Bargepole, Dec 31, 2006
    #5
  6. Harry Stottle

    Peter Parry Guest

    On Sun, 31 Dec 2006 11:47:52 -0000, "Harry Stottle"
    <> wrote:

    >This law has been in existence for several years, but it has been hard
    >to define previously because of the legal jargon used in official
    >documentation.


    What is difficult to understand or define or "legal jargon" about :-

    "Obligation to indicate selling price
    4. - (1) Subject to paragraph (2) and articles 9 and 10, where
    a trader indicates that any product is or may be for sale to a
    consumer, he shall indicate the selling price of that product in
    accordance with the provisions of this Order."

    ""selling price" means the final price for a unit of a product, or a
    given quantity of a product, including VAT and all other taxes;"

    (Statutory Instrument 2004 No. 102 The Price Marking Order 2004)

    >The ruling by the ASA, against a high profile company,
    >has now made it much clearer,


    ASA "rulings" (actually they are adjudications) have no particular
    weight at all, the ASA is a private body set up and funded by the
    advertising industry and its adjudications have no statutory
    significance.

    >I cannot see any justification for quoting VAT exclusive prices for goods or
    >items offered for sale to the general public, other than to mislead, and
    >any company doing this needs reporting.


    To Trading Standards as they are breaking the law - not the ASA which
    is a toothless tiger.

    >Regarding eBay, perhaps someone should send a copy of the ruling to
    >them, it is probably their responsibility to remove any advertisement
    >which doesn't comply with the ASA ruling, and eBay should enforce it.


    It isn't their responsibility as ASA adjudications have no legal
    significance whatsoever.

    --
    Peter Parry.
    http://www.wpp.ltd.uk/
    Peter Parry, Dec 31, 2006
    #6
  7. "Peter Parry" <> wrote in message
    news:...
    > On Sun, 31 Dec 2006 11:47:52 -0000, "Harry Stottle"
    > <> wrote:
    >
    >>This law has been in existence for several years, but it has been hard
    >>to define previously because of the legal jargon used in official
    >>documentation.

    >
    > What is difficult to understand or define or "legal jargon" about :-
    >
    > "Obligation to indicate selling price
    > 4. - (1) Subject to paragraph (2) and articles 9 and 10, where
    > a trader indicates that any product is or may be for sale to a
    > consumer, he shall indicate the selling price of that product in
    > accordance with the provisions of this Order."
    >
    > ""selling price" means the final price for a unit of a product, or a
    > given quantity of a product, including VAT and all other taxes;"
    >
    > (Statutory Instrument 2004 No. 102 The Price Marking Order 2004)
    >


    It was stated earlier that companies supplying other companies have been
    using the excuse that they are entitled to state VAT exclusive prices to
    the general public because VAT exclusive prices are the prices they use
    normally. Although I have never agreed with this, it has been hard to
    find a clear example to show how they are wrong, and so the ASA ruling,
    or adjudication, against Dell has now made this much clearer by
    combining the sales to the general public with the sales to other
    businesses, and stating it in their ruling. I am sure that Dell's
    lawyers would have gone through the details with a fine tooth comb
    before apologising for their mistake, so the point I was making with
    this thread was that all sales and services, offered with stated prices
    to the general public, must include the VAT inclusive price, which must
    be displayed as prominently as the VAT exclusive price if a VAT
    exclusive price is used, irrespective of if the company supplies mostly
    other VAT registered companies.
    Harry Stottle, Dec 31, 2006
    #7
  8. "Bargepole" <"=?x-user-defined?Q? Þ @ Þ ?="> wrote in message
    news:...
    > On Sun, 31 Dec 2006 10:51:45 GMT, "Raj"
    > <raj@(remove...)kundracomputers.co.uk> wrote:
    >
    >>Question: Will E bay enforce this as well?

    >
    > Cheatbay doesn'r enforce anything. I wouldn't touch them...


    Change the record.

    --
    <<< Unlock Your Phone's Potential >>>
    <<< www.uselessinfo.org.uk >>>
    <<< www.thephonelocker.co.uk >>>
    <<< www.gsm-solutions.co.uk >>>
    Richard Colton, Dec 31, 2006
    #8
  9. "Peter Parry" <> wrote in message
    news:...
    > On Sun, 31 Dec 2006 11:47:52 -0000, "Harry Stottle"
    > <> wrote:
    >
    >>This law has been in existence for several years, but it has been hard
    >>to define previously because of the legal jargon used in official
    >>documentation.

    >
    > What is difficult to understand or define or "legal jargon" about :-
    >
    > "Obligation to indicate selling price
    > 4. - (1) Subject to paragraph (2) and articles 9 and 10, where
    > a trader indicates that any product is or may be for sale to a
    > consumer, he shall indicate the selling price of that product in
    > accordance with the provisions of this Order."
    >
    > ""selling price" means the final price for a unit of a product, or a
    > given quantity of a product, including VAT and all other taxes;"
    >
    > (Statutory Instrument 2004 No. 102 The Price Marking Order 2004)


    Thanks Peter - that's helpful.

    Martin
    Schrodinger's cat, Dec 31, 2006
    #9
  10. "Richard Colton" <> wrote in message
    news:F9Qlh.23635$...
    >
    > "Bargepole" <"=?x-user-defined?Q? Þ @ Þ ?="> wrote in message
    > news:...
    >> On Sun, 31 Dec 2006 10:51:45 GMT, "Raj"
    >> <raj@(remove...)kundracomputers.co.uk> wrote:
    >>
    >>>Question: Will E bay enforce this as well?

    >>
    >> Cheatbay doesn'r enforce anything. I wouldn't touch them...

    >
    > Change the record.
    >


    Interestingly. Tazbar have been running TV ads. Wonder how well they are
    really doing.

    Ali
    Alison Hopkins, Dec 31, 2006
    #10
  11. Harry Stottle

    Peter Parry Guest

    On Sun, 31 Dec 2006 14:01:05 -0000, "Harry Stottle"
    <> wrote:


    >It was stated earlier that companies supplying other companies have been
    >using the excuse that they are entitled to state VAT exclusive prices to
    >the general public because VAT exclusive prices are the prices they use
    >normally.


    That excuse is clearly wrong. It didn't take the ASA to show it, one
    merely has to read the PMO.

    Where there is slight confusion (and will continue to be) is with
    retailers who advertise as trade suppliers (and are predominantly
    trade suppliers) but in practice accept orders from consumers. Most
    people buying from such suppliers know what they are doing though and
    are unlikely to be misled.

    >Although I have never agreed with this, it has been hard to
    >find a clear example to show how they are wrong,


    It's clearly stated in the PMO and Dell are by no means the first to
    have been found in default on this.
    --
    Peter Parry.
    http://www.wpp.ltd.uk/
    Peter Parry, Dec 31, 2006
    #11
  12. Harry Stottle

    johannes Guest

    Harry Stottle wrote:
    >

    [...]
    >
    > This law has been in existence for several years, but it has been hard
    > to define previously because of the legal jargon used in official
    > documentation. The ruling by the ASA, against a high profile company,
    > has now made it much clearer, and hopefully, companies will act on it as
    > soon as possible to avoid being reported to the ASA themselves. I cannot
    > see any justification for quoting VAT exclusive prices for goods or
    > items offered for sale to the general public, other than to mislead, and
    > any company doing this needs reporting.


    I quite agree with this. Why should this such an important matter for
    companies, unless they see the 'VAT excl.' as a device to fool the
    customer into thinking the goods are cheaper than it actually is.
    johannes, Dec 31, 2006
    #12
  13. Harry Stottle

    Lordy.UK Guest

    > Interestingly. Tazbar have been running TV ads.
    > Wonder how well they are really doing.


    I have a shop on eBay, signed up to TazBar in December after some people
    gave favourable reports but I haven't had a single sale through them
    yet. My eBay sales have been through the roof.

    I *sooo* want TazBar to do well but the odds are stacked well against
    them :/


    --
    Lordy.UK
    Lordy.UK, Dec 31, 2006
    #13
  14. "Lordy.UK" <> wrote in message
    news:...
    >> Interestingly. Tazbar have been running TV ads.
    >> Wonder how well they are really doing.

    >
    > I have a shop on eBay, signed up to TazBar in December after some people
    > gave favourable reports but I haven't had a single sale through them
    > yet. My eBay sales have been through the roof.


    Buy on one, sell on the other, eh?

    >
    > I *sooo* want TazBar to do well but the odds are stacked well against
    > them :/
    >


    Yup. It isn't healthy to have a monopoly. And I was taught years ago, when I
    first started selling, that no competition is actually bad for a business.
    I've found it to be true.

    Ali
    Alison Hopkins, Dec 31, 2006
    #14
  15. "Harry Stottle" <> wrote in message
    news:45978f8a$0$97274$...
    > There have been several discussions in various newsgroups recently about
    > if companies are obliged to quote VAT inclusive prices when advertising
    > goods or items for sale to the general public. The main objectors
    > against quoting VAT inclusive prices have been companies that sell to
    > other companies, but who also sell to the general public, and their
    > argument was that because they do not have to quote VAT inclusive prices
    > when selling to other companies, this somehow excuses them from quoting
    > VAT inclusive prices if they also sell to the general public.
    >
    > The ASA (Advertising Standard Agency)


    Sadly ASA has no clout.
    It will take a change by HM revenue and customs to actually make any
    difference.
    My business loses lots of sales by quoting VAT inclusive prices as it makes
    us look more expensive than our competitors.


    --


    Gordon Hudson || Hostroute.com Ltd
    e-mail:ghudson [at] hostroute.net
    http://www.hostroute.co.uk/resellers Host 5 web sites for £9 per month
    http://www.nameroute.co.uk/ Domain Names with free hosting and email
    http://www.myqth.co.uk/ 3000MB of web space for £29 per year
    Gordon Hudson, Dec 31, 2006
    #15
  16. Harry Stottle

    johannes Guest

    Gordon Hudson wrote:
    >
    > "Harry Stottle" <> wrote in message
    > news:45978f8a$0$97274$...
    > > There have been several discussions in various newsgroups recently about
    > > if companies are obliged to quote VAT inclusive prices when advertising
    > > goods or items for sale to the general public. The main objectors
    > > against quoting VAT inclusive prices have been companies that sell to
    > > other companies, but who also sell to the general public, and their
    > > argument was that because they do not have to quote VAT inclusive prices
    > > when selling to other companies, this somehow excuses them from quoting
    > > VAT inclusive prices if they also sell to the general public.
    > >
    > > The ASA (Advertising Standard Agency)

    >
    > Sadly ASA has no clout.
    > It will take a change by HM revenue and customs to actually make any
    > difference.
    > My business loses lots of sales by quoting VAT inclusive prices as it makes
    > us look more expensive than our competitors.


    How can that be? VAT inclusive prices are 17.5% higher that VAT exclusive,
    obviously... because you'd have to add the VAT. Any idiot can see that.
    johannes, Dec 31, 2006
    #16
  17. "johannes" <> wrote in message
    news:...
    >
    >
    > Gordon Hudson wrote:
    >>
    >> "Harry Stottle" <> wrote in message
    >> news:45978f8a$0$97274$...
    >> > There have been several discussions in various newsgroups recently
    >> > about
    >> > if companies are obliged to quote VAT inclusive prices when advertising
    >> > goods or items for sale to the general public. The main objectors
    >> > against quoting VAT inclusive prices have been companies that sell to
    >> > other companies, but who also sell to the general public, and their
    >> > argument was that because they do not have to quote VAT inclusive
    >> > prices
    >> > when selling to other companies, this somehow excuses them from quoting
    >> > VAT inclusive prices if they also sell to the general public.
    >> >
    >> > The ASA (Advertising Standard Agency)

    >>
    >> Sadly ASA has no clout.
    >> It will take a change by HM revenue and customs to actually make any
    >> difference.
    >> My business loses lots of sales by quoting VAT inclusive prices as it
    >> makes
    >> us look more expensive than our competitors.

    >
    > How can that be? VAT inclusive prices are 17.5% higher that VAT exclusive,
    > obviously... because you'd have to add the VAT. Any idiot can see that.


    The british public are obsessed with the headline price.

    People don't read the small print but when you get to the checkout the
    higher correct price is quoted.
    Its a con.
    We keep losing customers to companies that appear to be hugely cheaper but
    they are not.
    Another classic con is £1.99 per month but they only take annual payment and
    the VAT is not included so the actual price you will pay is £28.05.
    Our cheapest service is £29 per year.

    £28.05 and £29.00 are not much different.
    £1.99 headline price looks a lot cheaper.




    --


    Gordon Hudson || Hostroute.com Ltd
    e-mail:ghudson [at] hostroute.net
    http://www.hostroute.co.uk/resellers Host 5 web sites for £9 per month
    http://www.nameroute.co.uk/ Domain Names with free hosting and email
    http://www.myqth.co.uk/ 3000MB of web space for £29 per year
    Gordon Hudson, Dec 31, 2006
    #17
  18. "Gordon Hudson" <> wrote in message
    news:4597debd$0$757$...
    >
    > "Harry Stottle" <> wrote in message
    > news:45978f8a$0$97274$...
    >> There have been several discussions in various newsgroups recently
    >> about
    >> if companies are obliged to quote VAT inclusive prices when
    >> advertising
    >> goods or items for sale to the general public. The main objectors
    >> against quoting VAT inclusive prices have been companies that sell to
    >> other companies, but who also sell to the general public, and their
    >> argument was that because they do not have to quote VAT inclusive
    >> prices
    >> when selling to other companies, this somehow excuses them from
    >> quoting
    >> VAT inclusive prices if they also sell to the general public.
    >>
    >> The ASA (Advertising Standard Agency)

    >
    > Sadly ASA has no clout.
    > It will take a change by HM revenue and customs to actually make any
    > difference.
    > My business loses lots of sales by quoting VAT inclusive prices as it
    > makes us look more expensive than our competitors.
    >


    This is one of the reasons why the legislation was introduced, to make
    sure that everyone quotes VAT in the same way so prices can be easily
    compared. It is only since internet sales have become popular that some
    of these companies have been trying to get around the regulations by not
    quoting VAT inclusive prices, these companies have now been shown to be
    in the wrong, and should be reported.

    It doesn't matter if the ASA "has no clout", they can only adjudicate on
    the basis of the law, otherwise companies would not take any notice of
    them, and companies do take notice of the ASA. Dell have accepted they
    were wrong and apologised to the ASA, so the ASA censuring Dell is an
    important event in defining how VAT should be displayed.
    Harry Stottle, Dec 31, 2006
    #18
  19. Harry Stottle

    Ivor Jones Guest

    "Harry Stottle" <> wrote in
    message
    news:45978f8a$0$97274$
    > There have been several discussions in various newsgroups
    > recently about if companies are obliged to quote VAT
    > inclusive prices when advertising goods or items for sale
    > to the general public. The main objectors against quoting
    > VAT inclusive prices have been companies that sell to
    > other companies, but who also sell to the general public,
    > and their argument was that because they do not have to
    > quote VAT inclusive prices when selling to other
    > companies, this somehow excuses them from quoting VAT
    > inclusive prices if they also sell to the general public.


    Interesting though this thread is, may I ask the relevance to
    uk.telecom.voip..?

    Ivor
    Ivor Jones, Dec 31, 2006
    #19
  20. "Ivor Jones" <> wrote in message
    news:...

    > Interesting though this thread is, may I ask the relevance to
    > uk.telecom.voip..?
    >


    You've not heard about the new tax being imposed by HMRC? Vat on IP?

    Ali
    Alison Hopkins, Dec 31, 2006
    #20
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