Tax-exempt customer being charged tax

[HEIMike]

Hi there,

I am based in the UK and sell worldwide.

Am collecting duties for EU contries. Have sold a product to a business in the EU who use a frieght management company in country who handle their customs paperwork and collect and pay their taxes & duties so they want me to bill them excluding tax. Under Customers I have changed Tax Settings to Don't Collect Tax for this particular customer.

I create a new draft order, add the customer in question - their name appears in the top right and below is it written 'Customer is tax-exempt'. I add a product, below in the payment section it says Taxes: Customer exempt. All good.

Then I add shipping and suddenly tax for the product is re-added. This does not change if the draft order is converted to a live order. What am I doing wrong?

For time being I have removed shipping and used the 'Custom Product' feature to add a product called 'Shipping' which has done the trick, it just leaves a product line item with no image which looks a bit untidy.

Many thanks in advance,

Mike