I joined Shopify recently and haven't launched my website yet. I have had a small business online over Instagram which was going relatively well so I decided to open a Shopify website. I have many domestic (UK) customers, but a lot more international (especially US & Europe).
Context: This doesn’t concern dropshipping. I hand-make products in the UK and sell them as a side job.
I have created drafts of products I want to sell, however, one topic I just can't get my head around.
“Charge tax on this product"
What exactly does that mean?
I am aware there are two types of taxes:
1. Income tax which is dealt through Self Assessment etc., I have registered for self-employed etc. so that is sorted. 2. Sales tax, such as VAT. I don't make nearly enough to be eligible for VAT so that's out of the question from my understanding.
What does that product tax on the checkbox refer to, then?
Do I need to charge tax on product or not?
Is there something I am missing?
What do I do about my UK and international customers?