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Zero Rated VAT Relief for Disabled Customers UK

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groly
Tourist
3 0 2

Hello, 

 

A number of my customers (but not all) will be eligible for zero rated VAT relief due to a disability. I'm searching for a way to modify my purchasing process to enable eligible customers to:  

 

1. Tick a box saying they are eligible for zero rated VAT relief on the product (which removes the 20% VAT from the price)

2. Then complete a standard declaration form with their details (which is then sent to me for record / tax purposes)

3. Then complete the standard checkout process, purchasing the product with zero rated VAT. 

 

Can anyone provide advice on how this might be achieved? 

 

Many thanks in advance, any help is greatly appreciated. 

Accepted Solution (1)

Accepted Solutions
Nick
Community Moderator
Community Moderator
4520 433 987

This is an accepted solution.

Hi @RossCare,

Great question! 

You can indeed apply a tax override so it would only apply for certain products and not others. You can do this by taking the following steps below:

  1. In your Shopify admin, click Products, and then click the name of the product.

  2. In the Pricing section, uncheck Charge taxes on this product.

  3. Click Save.

Shopify has a guide for this which you can see here too. 

Nick | Community Moderator @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

View solution in original post

Replies 16 (16)
Nick
Community Moderator
Community Moderator
4520 433 987

Hi @groly,

Nick here from Shopify. 

This is a great question. There is a workaround for this, which might not be the same workflow that you have outlined below, but it would be your best bet in this scenario. You can apply a tax override by setting up tax-exempt customers where they would not be charged any tax when they complete a checkout. Something to remember is that the customers must check out with the same email account they have listed on their customer account. You can apply a tax-exempt customer by taking the following steps:

  1. From your Shopify admin, go to Customers.

  2. Find the customer you want to exempt from all taxes, and then click their name.

  3. In the Contact section, click Edit.

  4. Check Customer is tax exempt.

  5. Click Save.

You can also see the full help document Shopify has for this here. Hope this helps! 

 

 

Nick | Community Moderator @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

groly
Tourist
3 0 2

Hi @Nick , 

 

Many thanks for your reply. I'm not sure I quite understand how that workflow would work... 

 

If I understand correctly, your solution would work if they were an existing customer and they had requested to purchase VAT free. I could then go in and adjust their account to make them tax exempt before they checked out again.

 

If they were a first time customer buying a product, I can't see how this would work as they go through the check out process themselves? 

 

It is seeming really difficult to allow disabled customers to purchase VAT free on shopify. Apologies if I've misunderstood your suggestion - any help greatly appreciated. 

 

Many thanks,

Geoff.

Nick
Community Moderator
Community Moderator
4520 433 987

Hi @groly,

I completely understand where you are coming from with that. The reason I suggested this particular method is that you would need your customers to complete a standard declaration form before they are able to be tax exempt. You could do this with a Contact Us page (I will touch more on this later) but once you have the customer details from this declaration you could create a customer in the admin and register them as tax-free upon doing so. For non-first time customers, they would already have created profiles in the Shopify admin after making an order and you would need to just go into their profile and tick them as tax-free shown below. 

 

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I touched on a contact us page above to help gather the customer information for the declaration form for you. Shopify has a helpful tutorial going through all the steps on how to add a contacts us page for this which you can see here

I know it's a little bit of a tricky setup, but I feel it is the best way for you to accomplish what you're looking to do. Can you let me know if you think this would work for you? 

 

 

 

Nick | Community Moderator @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

RossCare
New Member
2 0 1

Hello, thank you for clearly laying out this information. I am considering Shopify as the platform for a new site, where this feature will be essential. 

 

Could you clarify one further point? The VAT relief rules only apply to certain products. When setting a customer as exempt from VAT, is it possible to only allow it to apply to specific items and charge tax on others?

 

Many thanks,

Nick
Community Moderator
Community Moderator
4520 433 987

This is an accepted solution.

Hi @RossCare,

Great question! 

You can indeed apply a tax override so it would only apply for certain products and not others. You can do this by taking the following steps below:

  1. In your Shopify admin, click Products, and then click the name of the product.

  2. In the Pricing section, uncheck Charge taxes on this product.

  3. Click Save.

Shopify has a guide for this which you can see here too. 

Nick | Community Moderator @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

RossCare
New Member
2 0 1

Thanks for your fast response!

 

The exemption would only apply to specific products, but from your link, I can see there is the option to override a collection...

 

"To set up a tax override, you can create a collection for the products that are tax exempt, and then apply the override to that collection."

 

Thank you.

Sensorykraft
New Member
1 0 1

Hello, 

 

I've got exactly the same problem here. 

 

I've read through the thread but I'm a little frustrated that you can't achieve this. From what I can see Shopify doesn't seem to have an add-in feature to allow you to declare your disability at the checkout. We are a UK company and mainly sell to the UK market. Some of our products are Disability VAT exempt eligible. Currently not having such a feature is causing a barrier to sales as people are forced to phone up to pay for their order and submit their disability information via email.  

 

I've attached an example of anther company in the UK capturing the information at the checkout when a product which is vat exempt eligible is added. Please advise how to set up something similarvat exemption form.png to this.  Many thanks

Toby_S
Shopify Partner
3 0 6

As SensoryKraft says - the thread doesn't actually offer a solution. I'm wondering in the last few months if anyone has made progress or found a solution?

We have built a full shop at no cost for a charity selling sensory products for children with disabilities. Some items are eligible for tax/vat relief, some are not.

I've used tags to show a notice if it's eligible. I also show pricing inclusive and exclusive of tax/vat so it's clear for the user. 

Problem Summary:

1. Yes, we can can mark a registered customer as tax/vat exempt in Customer Admin, but ONLY certain products are eligible, not all products. 

2. If we mark a product as exempt, it's global for all customers.

We've come too far to drop using Shopify - we need a workaround here. On bended-knee... "Help!"

Nuttifox
New Member
2 0 2

Hi Toby, did you manage to find a solution for this. We are also trying to build a VAT exemption workflow for customers on Shopify?

Toby_S
Shopify Partner
3 0 6

Hi @Nuttifox - it's pretty backwards but yes, we worked around it. This is our flow:

1. Add a product that IS eligible for VAT relief for those with disabilities - put the price in as the ex VAT cost and tick the box 'charge tax on this' (I know, it's backwards). 
2. Add a product that ISN'T eligible for VAT relief for anyone - put the price in as the including VAT cost and don't tick the 'charge tax' box.
3. In your product.liquid page you can identify ones eligible with something like this:

{% if product.variants[0].taxable %} This is eligible for VAT relief - <a href="/page/vat-relief">click here</a> to find out more{% endif %}

4. Create a page with more info and a form for the customer to fill out - ask them to enter their email. After submission, ask them to create an account with the same email address.
5. In admin, under customers, find the customer who's claiming as eligible. In the right is 'Tax settings' and make their account 'taxes are not collected'.

You might also want to show prices depending on VAT relief or not. For example, in cart.liquid you could do something like this:

{% if item.product.variants[0].taxable %}
  <!--Eligible for relief-->
  {{ item.price | money }}
{% else %}
  <!--Not eligible-->
  {{ item.price | divided_by: 1.2 | money }}
{% endif %}

It relies on the shop owner/admin from understanding how to set products prices and tax/vat boxes but it's the only way we could think to do it.

Hope that makes (backwards) sense and helps.

Toby_S
Shopify Partner
3 0 6

Hi @Nuttifox - it's pretty backwards but yes, we worked around it. This is our flow:

1. Add a product that IS eligible for VAT relief for those with disabilities - put the price in as the ex VAT cost and tick the box 'charge tax on this' (I know, it's backwards). 
2. Add a product that ISN'T eligible for VAG relief for anyone - put the price in as the including VAT cost and don't tick the 'charge tax' box.
3. In your product.liquid page you can identify ones eligible with something like this:

{% if product.variants[0].taxable %} This is eligible for VAT relief - <a href="/page/vat-relief">click here</a> to find out more{% endif %}

4. Create a page with more info and a form for the customer to fill out - ask them to enter their email. After submission, ask them to create an account with the same email address.
5. In admin, under customers, find the customer who's claiming as eligible. In the right is 'Tax settings' and make their account 'taxes are not collected'.

You might also want to show prices depending on VAT relief or not. For example, in cart.liquid you could do something like this:

{% if item.product.variants[0].taxable %}
  <!--Eligible for relief-->
  {{ item.price | money }}
{% else %}
  <!--Not eligible-->
  {{ item.price | divided_by: 1.2 | money }}
{% endif %}

It relies on the shop owner/admin from understanding how to set products prices and tax/vat boxes but it's the only way we could think to do it.

Hope that makes (backwards) sense and helps.

MiMoWigs
Tourist
6 0 10

I totally agree. 

this “workaround” is not a work around at all. 

I think Shopify need to understand the different between “zero rated” and “vat exempt” as they are different.

Shopify - for example........ I am bald..... if I buy a wig, I am entitled to that wig to be zero rated and pay no VAT. HOWEVER, that same product you WILL pay VAT on.

 

I can not be marked as exempt for paying VAT, as if I want to buy hats or headscarves or wig shampoo - I MUST pay VAT on those items. 

this is ludicrous. The zero rate applies only to some customers and certain products. 

 

MiMoWigs
Tourist
6 0 10

my problem is that doing this will work price wise..... HOWEVER, this work around then will charge the correct price, but the invoice will not reflect that the products that do require vat include this. This is a mess for accounting, and does not solve anything. The invoice and taxes then are not showing correctly at all - can you help with this?

 

Nick
Community Moderator
Community Moderator
4520 433 987

Hi @MiMoWigs,

I spoke to someone on the tax team and they said it's still not possible right now. I have submitted a feature request for it though! 

@Toby_S has summed the current situation up very well. 

1. Yes, we can can mark a registered customer as tax/vat exempt in Customer Admin, but ONLY certain products are eligible, not all products. 
2. If we mark a product as exempt, it’s global for all customers.
 
So, either you set the product as exempt - but this will apply for all customers. Or you set the customer as exempt, but this will apply to all products they purchase.
Its not possible to mix it, i.e. if this specific customer is purchasing this specific set of products, make it exempt.
 

Nick | Community Moderator @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

Fiona_BCD
Shopify Partner
3 0 0

Hi, 

 

I have just run through all the threads on this topic in the community.  We are in the same situation. There seems like there is a number of merchants in the UK who would benefit from the same solution.   

 

Is there an update from Shopify?

 

Is there any developers willing to look at writing an app or solution to help us? 

Is there a noticeboard for developers I can pin this to?

Fiona_BCD
Shopify Partner
3 0 0

Hi, I have just run through all the threads on this topic in the community. We are in the same situation. There seems like there is a number of merchants in the UK who would benefit from the same solution. Is there an update from Shopify? Is there any developers willing to look at writing an app or solution to help us? Is there a noticeboard for developers I can pin this to?