I'm setting up a new shop which sells baby clothes. I have checked with a few key sources and the products I will be selling are VAT-exempt. My whole business will be in this product. Thus I don't need to pay VAT to import them into the UK from China, and I also don't need to charge VAT when I sell the item to customers.
The problem is, I want to be able to show VAT on the customer's order confirmation/order invoice, but have it show £0.00. In the tax area of the Shopify Admin it defaults to a 20% tax rate for the UK, and I have no way of setting this to 0. Meaning either the subject of VAT is entirely absent from the customer's invoice/order summary, or it is present but only at 20%.
How can I show that VAT was accounted for but that it was zero-rated (exempt)?
I'm not sure if this is the solution but we had problems for a long time with customers asking for an invoice after placing an order. Our goods are not VAT exempt and most of our customers are VAT registered, so they needed a VAT invoice, not just an order acknowledgement.
We signed up to Sufio. It's an app. that generates an invoice for every order. I don't know for sure but I suspect you can adjust the tax rate as you need. You'd have to discuss your specific query with them first.
They are super helpful and the app. is incredibly easy to set up and use. You can also generate invoices outside of any sales you make via Shopify. Not sure if that would be relevant for you but it's a very useful function for us.
You can always set up a free trial and see if it works for you.
Hope this helps :-)
Good luck with your new store!