Shopify is not calculating the VAT on products and shipping correctly.

Rillix
Visitor
1 0 0

Hi everyone,

 

We are having some issues with Shopify in the UK calculating VAT incorrectly. I have attached the order below. We are VAT registered in the UK, this order is for a customer in the UK. The hand tools and postage include VAT, the kids gloves are zero-rated (the product is flagged to not charge tax).

 

The hand tools are £79.80 and include £13.30 VAT
The postage is £4.95 and includes £0.82 VAT

Total VAT should be £14.12, yet the order is showing £13.91.

 

Rillix_0-1716463572088.png

It looks like Shopify is not using 20% to work out its VAT. Has anyone else experienced this, or know if we are doing something wrong?

 

Many thanks

Reply 1 (1)

stevem1981
Shopify Partner
6 1 0

Hi

 

The shipping tax is worked out spread across all of the Vattable / non vattable items

 

You have sub total of 79.80 (Vattable)

Subtotal of 108.30 (all items)

79.80 / 108.30 gives you the % of the vat worked out on the shipping of 4.95 (73.68%) Take the 20% calculation of the 4.95 which rounded would be 0.83

Now multiply the 0.7368 by 0.83 and you get 0.61.

 

Subtotal: £108.30
Shipping £.495
Taxes: Vat Items (£13.30) + portioned Vat of Shipping (0.61p)

Total: £113.25

 

Hope that helps