HM Revenue & Customs have announced that charitable organisations will no longer have to pay VAT on their pay per click advertising. This will act as a huge boost to the charity sector, who had been lobbying for some time for zero-rated VAT on their online advertising requirements.

Charity advertisements placed on third party websites had already qualified for a zero-rating in terms of VAT but until recently HMRC had adjudged that a PPC advert acted as a means of access to the charity’s website and refused to back them with zero VAT. However, following some fairly strong complaints from the charity sector, HMRC has conceded that PPC, along with the associated copyright and design services, qualify for a zero VAT rating.