20 replies to this topic

[coffee-services]

Hi all

Everyone in the UK on my site pays tax but whenever someone outside of the UK orders it doesn't add the tax, i asked my accountant about this and he said we have to charge tax, please can someone tell me how i can set this up?


Regards
Mike

[usernamenone]

in your admin

Locations / Taxes

You must add all zones you ship to into taxes by clicking on the insert button

[coffee-services]

Thanks for you quick reply...

what if it's world wide how do i get all the zones?

do i use codes for zones?

can you give an example?

Mike

[DunWeb]

@coffee-services,

Mike, are you sure you want to charge your out of country customers UK tax ? If I am ordering from Canada, I most certainly would not want to pay taxes to your country that I don't reside in as I am surely going to have to pay taxes, duties and custom fees when that product arrives in Canada.

I know that orders from outside Canada and the USA are NOT charged taxes from the shipping country. I would check again with your tax laws to ensure you are supposed to charge tax on international orders, collecting taxes illegally is just as bad as not collecting taxes.



Chris

[coffee-services]

I asked my Accountant, and he said we pay tax on items and charge tax on them regardless of where they go, it's the customers resposibility to claim tax back where due...

I order supplies from itally spain and germany and they all charge me tax, i then claim the tax they have charged me back thats why theres a TAX/VAT number it's this number people use to claim tax back...

if i go to any USA site all websites charge me tax, and i'm in UK...

[usernamenone]

http://www.nolo.com/legal-encyclopedia/sales-tax-internet-29919.html

[coffee-services]

i've read through that twice and i still don't understand it, maybe it's because it's now 4am in UK i need to get sleep and read it when i'm actually awake...

The thing is if i pay tax for an item why should i loose that money just because you buying it from another country, i need to resell the item with the tax that i paid for it surely.

[DunWeb]

@usernamenone,

Thats a broken link




Chris

[DunWeb]

coffee-services, on 18 January 2012, 04:02, said:

i've read through that twice and i still don't understand it, maybe it's because it's now 4am in UK i need to get sleep and read it when i'm actually awake...

The thing is if i pay tax for an item why should i loose that money just because you buying it from another country, i need to resell the item with the tax that i paid for it surely.

In North America, we would claim the sale as a tax credit when doing business taxes. I am not sure how it works in the UK.



Chris

[DunWeb]

@coffee-services,

You should read this from the HM Revenue & Customs Website. You in fact do NOT collect taxes, you apply the sale as a tax credit the same as companies from North America would do on international sales.



Chris

[coffee-services]

@DunWeb looks like you offer some valuable services, might need you for some work...

but still looking for an answer for this...

good night

[usernamenone]

The UK is to pay a Value Added Tax for ecommerce. It is not called a sales tax.


VAT is chargeable on goods sold within a country using e-commerce or distance selling methods (eg mail order). If you ship goods from one European country to another then VAT remains payable. Smaller businesses can simply charge their national VAT rate until a value threshold is reached, above which VAT must be charged at the national rate of the European consumer. In the UK the threshold is £70,000.

€100,000 in France, Germany Netherlands, and Austria, and €35,000 in most other countries like Spain, Italy, Portugal, and Finland.

Retailers need to register in each of the countries where they have customers and pay VAT to the national authorities. So a UK e-tailer could simply charge 17.5% on sales until his foreign sales had reached £70,000 after which point he would charge 19.6% on goods to France, 25% on goods to Norway etc

I don't think you have to pay worldwide but to European only.

In this case I would try to add the % of sales somewhere between the shopping cart and payment. Haven't looked but there may be an addon.

[DunWeb]

coffee-services, on 17 January 2012, 18:40, said:

Hi all

Everyone in the UK on my site pays tax but whenever someone outside of the UK orders it doesn't add the tax, i asked my accountant about this and he said we have to charge tax, please can someone tell me how i can set this up?


Regards
Mike

@usernamenone,

As Mike originally stated, he wants to collect taxes for sales OUTSIDE the UK. In that case, taxes are NOT collected per the HM Revenue & Customs website I directed him to.



Chris

[coffee-services]

@DunWeb i want to charge all my customers the VAT that i pay on goods when i buy them, i don't think this is illegal, my accountant would have told me not to, where in that HM Revenue & Customs website does it state i cannot charge people overseas VAT.

i'm almost certain that i payed tax or vat when i purchase items from the USA, i have proof actually, i recently bought from a website called bundlebox, they supply a service whereby they offer items for sale to the UK that are not available in the UK , not only did they charge me VAT at the stores where i purchased but then i payd Vat or tax for services from bundlebox,

My business does not actually make £70 000 a year not even close, in the UK you don't need to charge VAT or pay VAT if you don't make £70 000 but i had to register for a VAT number due to getting customers that require a VAT receipt like hotels, coffee shops etc...

I will double check with my accountant and he knows he's stuff. He would not tell me to charge overseas customers if it were illegal or wrong to do so...

Mike

Edited by coffee-services, 18 January 2012, 09:55.

[DunWeb]

@coffee-services,

Mike,

Ofcourse, it is your choice to charge tax to ALL customers, if you read the FAQ's in the list I send you about exporting your products you will see you are NOT suppose to charge tax. However, that is between you and your tax agency at audit time. To charge tax to everyone, ensure everyone is listed in the tax zone you created. Admin>> locations/taxes>> tax zones




Chris

[dannix]

coffee-services, on 18 January 2012, 09:54, said:

@DunWeb
My business does not actually make £70 000 a year not even close, in the UK you don't need to charge VAT or pay VAT if you don't make £70 000 but i had to register for a VAT number due to getting customers that require a VAT receipt like hotels, coffee shops etc...

How odd, customers wouldn't need a VAT invoice if you didn't volentarly register and therfore charge VAT, simply as there would be nothing for them to claim back!
You want to claim the vat you paid on your product before resale. So you claim back 20% from HMRC but then you increase the value with your profit and add 20% to the now larger figure - in essence your worse off

£8+ £2VAT trade product
vat claimed back
£8 + £4 margin = £12 to resell + £2.40 VAT you are collecting on behalf of HMRC total sale value = £14.40 for you to make £4 profit
So you got your £2 back, but now your charging £2.40 extra...

vs

£10 inc VAT trade product
£10 + £4 profit = £14 resale value
You can't claim VAT, you don't charge VAT and still make £4 but your retail value is lower, thus easier to sell or you can increase your profit

[Dennisra]

Mike:
You probably should get a new accountant.

[geoffreywalton]

Mike

As I understand it, you should only charge VAT if you are registered for VAT which you have to do once your turnover is over a certain value. But you can register even if your turnover is less!!

If you are registered, you can claim back any VAT that is charged to you and then you charge VAT on any order delivered to an EU country. NOT ANYWHERE IN THE WORLD. So deliver to the US, no tax, deliver to France, charge vat @ UK VAT rate.

Note delivered, not invoiced.

This VAT is then paid to HMRC.

If you are not registered you can not charge VAT.

You should challenge your accountant on this, maybe he thinks you have gone independant already

Cheers

G

[geoffreywalton]

Try looking here for how to set up osc for VAT

Cheers

G

[coffee-services]

@dannix

We are VAT registered, even though we don't make anywhere close to £70 000 a year, we have customers who expect VAT reciepts so we had no choice but to volintarily register for VAT