Iron Horse House (IHH) stated that it was impossible for the website to be misleading as every price claim was immediately qualified with text stating that VAT applied to the price. They said that text was clearly displayed and given equal prominence to the quoted prices. In addition, they stated that approximately 30% of their sales were made to customers who did not pay VAT, and therefore if the price claim was inclusive of VAT then those consumers would be misled.
The ASA acknowledged Iron Horse House's belief that their website was not within the ASA's remit as they were not a UK based company. We noted, however, that the website's URL had the top-level domain ".uk", that all the prices were given in pound sterling, and that the e-mail addresses provided to enable consumers to contact IHH all ended ".co.uk". We therefore considered that the website originated in the UK and fell within the ASA's remit.
We noted that the CAP Code made clear that VAT exclusive prices could be given only if all customers to whom the price claim was addressed paid no VAT or could recover the cost of VAT. We understood that all the price claims on the site were quoted exclusive of VAT but that approximately 70% of the site's customers paid VAT on their purchases. We therefore considered that the price claims were not clearly addressed to consumers who did not have to pay VAT and that the site should have displayed VAT-inclusive prices with at least equal prominence to the stated prices.
Because VAT was not included in the stated prices, and because the majority of Iron Horse House's customers would have to pay VAT, we concluded that the price claims were misleading.
The claims breached CAP Code rules 3.1 and 3.3 (Misleading advertising) and 3.18 (Prices)
