Shipping Tax Question |
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Support
RomanCart Team Joined: 16 March 2004 Location: United Kingdom Status: Offline Points: 10794 |
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Posted: 20 February 2012 at 5:32pm |
Hi,
Does anyone have any case where shipping prices should include tax when the product prices exclude tax. Or where shipping prices should not include tax where product prices do include tax. We are trying to simplify the system and would like to make is so that the 'includes tax' status of shipping methods are the same as the global setting for the cart. Many Thanks Support Edited by Support - 20 February 2012 at 5:32pm |
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RitaL
Newbie Joined: 08 August 2011 Location: UK Status: Offline Points: 22 |
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If shipping to the Channel Islands then the goods have no tax, but some royal mail services now attract VAT. e.g. "Special Delivery"
Vice Versa If shipping within mainland UK then goods have VAT, but standard Royal Mail has no VAT. Also some products attract different rates of VAT. Rita. Lincraft Stationery |
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Support
RomanCart Team Joined: 16 March 2004 Location: United Kingdom Status: Offline Points: 10794 |
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Hi Rita,
Thanks for the reply. Even though the Royal Mail are exempt from VAT, if you are VAT registered you still have to charge VAT on the shipping amount to your customers as technically you are supplying the postage service even though you may be using Royal Mail. If shipping to the Channel Islands and not charging tax on the goods, then you would also not charge tax on the shipping whether or not you actually had to pay it yourself. Therefore in both these cases the tax status of the shipping methods would be the same as the goods. Many Thanks Support DISCLAIMER: We do not provide tax advice. Check with the VAT office for information on when, where and how much VAT to pay for any given circumstance. Never rely on information from these forums or other non HMRC sources. |
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bjcam
Regular Joined: 02 February 2010 Location: Glasgow Status: Offline Points: 53 |
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Hi Support
I have just added a book to the product list which is zero VAT, but shipping is vatable. |
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B J Cam
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Support
RomanCart Team Joined: 16 March 2004 Location: United Kingdom Status: Offline Points: 10794 |
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Hi,
Do you mean that shipping is charging VAT, but you are not expecting this? Many thanks Support |
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raineshoe
Senior Member Joined: 03 October 2007 Location: United Kingdom Status: Offline Points: 1502 |
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I've had this very discussion elsewhere and this is what the VAT office told me, although someone else said I should ask them again as he thinks I've been advised wrongly. Seems you've been told the same information though. |
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ilewis04
Newbie Joined: 02 July 2008 Status: Offline Points: 16 |
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I had a similar question & put it to the VAT office & they told me that as the postage charge is effectively "post & packing" i.e. a different figure to what is actually charged by Royal Mail (even if only by a fraction of a panny) then this is a UK service provided within the UK & as a VAT registered business the postage charged is liable for VAT at the standard rate. For us what this meant was that anything snt outside of the EU had to have VAT charged on the postage, but not on the goods themselves. Although I have to admit that I wasn't 100% convinced about this at the time, but this was the VAT man & not someone I felt brave enough to argue with!
Hope this helps. |
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Rechargeable batteries & more.
Component-Shop |
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rscass
Senior Member Joined: 07 November 2007 Status: Offline Points: 720 |
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The full VAT notice re. P&P is notice 700/24.
It's here: http://tinyurl.com/kdhgw The notice makes a number of references to VAT being applied to a separate packing service. Example of a separate packaging service: If you offer a gift wrapping service on your website at Christmas for an extra fee, or if you have an entirely separate charge for packing (maybe a surcharge to cover optional extra padding for customers of a nervous disposition), then the VAT rate is charged at the standard rate [to this EXTRA packaging element supplied at the customer's request - not normally needed to ship the goods] if the goods are to be delivered within the EU - regardless of whether the supplied goods are standard rated or not. This applies whether the items you are posting as standard rated or not. But as a bog-standard mail order business, you're not offering an entirely separate packaging service nor are you buying stamps on your customer's behalf (Google 'disbursements, VAT'). Delivery, is not an optional extra - you are simply delivering the goods as part of your contract with the customer - there is no other option. As such, the VAT rate applied to P&P will be the same as the goods that are shipped (split accordingly if there's a mix of standard and zero rate/exempt goods). An accountant will confirm the above. Richard. |
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rscass
Senior Member Joined: 07 November 2007 Status: Offline Points: 720 |
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That is wrong. Goods shipped outside of the EU are zero rated - so is the shipping. |
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rscass
Senior Member Joined: 07 November 2007 Status: Offline Points: 720 |
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Support - for your purposes, I would urge you to speak to a professional or someone at HMRC who speaks plain English.
I used to work for a firm of accountants, but it was a long time ago. In answer to the original question, the example I've outlined above is the only one I can think of where packaging would be treated differently to the goods for VAT purposes. Richard. |
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