Accounting and Taxes

Jen_Arnall-Cull · ‎08-05-2017

Hi,

I've read through the help pages on taxes, but I can't find what I need to keep me compliant with UK tax law...

I should be charging VAT on shipping, only when the products being purchased are subject to VAT. So if someone buys yarn from my online shop I should be charging 20% VAT on shipping because yarn is VATable at 20%. However, if someone buys a book from me, I shouldn't be charging VAT on shipping because books are VATable at 0%.

I can see how to set a tax override to make all shipping to a specific country taxed at a certain rate, and I can see how to override the tax settings to make all books charge 0% VAT, but what I can't see is a way to tell Shopify that when the only purchase is a book (perhaps in my Books collection?), then the shipping should not include any VAT.

Is there a way to do this within Shopify? And if not, is there an app that will do it? Preferably without having to go with an expensive outsourcing of tax stuff to a service like Sufio as I'm managing all other aspects of tax accounting (including digital EU taxes) without any difficulty! 🙂

Many thanks for your help.

Matthew_Stockwe · ‎08-08-2017

I have the same problem:

How do I charge shipping tax on VATable products only? (My company is VAT registered.)

UK law says I should be charging VAT on shipping, but only when the products being sold are subject to VAT. So if someone buys coconut oil from my store I should be charging 0% VAT on shipping because coconut oil is VAT zero rated. However, if someone buys a coconut soap, I should charge VAT on shipping because soap is VATable at 20%.

The Shopify overrides do not have an option to change the shipping tax by product.

This is a legal issue.

Jen_Arnall-Cull · ‎08-09-2017

I think the answer is probably not to send out VAT invoices from Shopify, but rather to just send packing slips. We use a separate accounting software which can do VAT correctly, so if anyone needs a VAT invoice we will generate it from our accounting software. I couldn't find any way to get Shopify to calculate it correctly. I hope that helps.