Hello,
We are a UK registered business and are in the process of registering for VAT (Flat Rate Scheme). I found the steps below on how to handle this in Shopify but I have some questions.
Steps:
- Shopify Admin >Settings > Taxes
- Tax Regions>UK>Set Up
- VAT Collection > Click collect VAT
- Enter VAT Number
- Click collect VAT
Will the VAT be automatically added to our prices for customers to see if we enable it using the steps above? We already include the VAT in our cost price and in our RRP (selling price) so we do not want the prices to change. It would be good to know in advance. If it does, again how did you handle this?
We have included VAT in our cost price from day one. If we paid the supplier for a product £20 + vat (20%) then we set the cost price to be £24. As we are about to go on the FRS our margin is about to decrease by 6.5%.
a) Would you increase every products ‘cost price’ by 6.5% so our reports read correct on the profit margins?
b) Use a different method?
- When we enable VAT in Shopify I would assume it will show a little tag line at checkout like ‘including VAT at £3.33’ or something similar. This would then change to say ‘including VAT at £7.77’ if the customer put in an address outside of the UK if we were IOSS registered and used Shopify as the middle man. But we don’t so does anyone know how this might appear to the customers?
A lot of questions but thank you for any advice provided. It really helps.