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. A website for Travelcrew, a retailer of flights and holidays, breached this rule, as the ASA expected the advertised prices to include all non-optional fees relevant to each airline and flight advertised (Trav Expert Ltd t/a Travelcrew, 16 October 2024). Similarly, a magazine ad for a holiday property investment company was ruled to have not included non-optional, ongoing fees that applied to all or most buyers (Luxury Lodge Estates Company Ltd t/a Luxury Lodges, 12 February 2025).

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). See Luxury Lodge Estates Company Ltd t/a Luxury Lodges, 12 February 2025 and Pegasus Homes Ltd t/a Pegasus Homes, 13 November 2024.

Whilst yet to be confirmed by the ASA by way of formal ruling, it is our understanding that, following the introduction of the Unfair Commercial Practices (UCP) provisions in the Digital Markets, Competition and Consumers Act 2024 (DMCCA), the information required under rule 3.19 needs to be set out with as much prominence as the advertised price. In the absence of any ASA precedent, marketers are advised to seek legal advice on this point.

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

Prior to the introduction of the UCP provisions in the DMCCA, one-off and periodic charges could be presented separately from the main price statement, but provided the type and amount of these costs was 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).

In the absence of ASA precedent, it is not yet clear how to present one-off charges following the introduction of the UCP provisions in the DMCCA. Marketers are advised to refer to the CMA’s relevant guidance, and seek legal advice.

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

If delivery charges apply per product and consumers have no option but to pay these to receive the product, this becomes a non-optional charge that must be included in the stated price (rule 3.18).

Marketing communications that state prices must also state any optional delivery, freight or postal charges, including any taxes. If it is not possible to calculate the optional 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).

Rule 3.20 is broadly reflected in rule 3.4.4 of the CAP Code, which states that any freight, delivery or postal charges, including any taxes, not already included in the total price of the product but which the consumer may choose to incur cannot be omitted from marketing communications that quote prices, given this information will constitute material information for the purposes of rule 3.4.

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