What are the options?

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. However, VAT-exclusive prices may be given if 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.

In essence this means that all quoted prices must include all non-optional fees or charges that apply to all or most buyers, for example compulsory delivery charges or credit card fees. They must also include VAT unless all of the individuals the price claim is addressed to pay no VAT or can recover it, in which case the amount or rate of VAT needs to be stated prominently. The aim of this rule is to ensure that all price claims are accurate and are not likely to mislead private or business consumers.

More information on the inclusion of non-optional taxes and charges can be found in our Advice Online entries on Compulsory costs and charges: General, Compulsory costs and charges: VAT and Compulsory costs and charges: Credit and debit card fees.

Clear and upfront

Similarly, telecommunications packages often have further applicable charges such as rental fees or installation costs. Such costs should be made clear upfront in order to avoid ads for such products being considered misleading. For example, offering line rental for £8.99 but failing to mention an additional non-optional charge of £1.49 for a “care package” would be considered problematic. You can read more on this in our Advice Online on Compulsory charges: Telecommunications ads.

Rule 3.19 states if a tax, duty, fee or charge cannot be calculated in advance, for example, because it depends on the consumer’s circumstances, the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated.

Rule 3.19 applies in many circumstances where a fee or charge cannot be calculated in advance, for example a lettings agents’ fee that is dependent on the particular applicant’s circumstances or the location of the property. The minimum amount of information that should be included in ads of this nature is a clear statement that fees apply and a statement of how they are calculated. More information on the inclusion of fees that cannot be calculated in advance can be found in the Advice Online entry Compulsory costs and charges: Lettings agents.

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