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14steve14

UK VAT settings

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Business is booming in the lock downs and I now have to think about setting up my site for UK VAT.

Hopefully I have this bit right. I have set up tax rates for UK VAT at 20% which I hope is how it should be done. When testing this seems to work correct and includes VAT at 20% when the products have the tax class set up.

The bit I dont get is what to do about the rest of the world. and which customers should and should not be paying the VAT.

Is there a good guide on these forums anywhere as I cant find anything?

Any help appreciated.

Also before I forget is there an easy way to turn on the tax class thing for all products rather than having to do them all individually?

Edited by 14steve14

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37 minutes ago, 14steve14 said:

Also before I forget is there an easy way to turn on the tax class thing for all products rather than having to do them all individually?

look at

products_tax_class_id 

in the products table 

 


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1 hour ago, 14steve14 said:

The bit I dont get is what to do about the rest of the world. and which customers should and should not be paying the VAT.

Read:
https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad

 


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1 hour ago, Heatherbell said:

I get that, but how is it set up in Phoenix.


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2 hours ago, puddlec said:

look at

products_tax_class_id 

in the products table 

 

I take it then that there must be some sql somewhere that makes the change.


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12 minutes ago, 14steve14 said:

I get that, but how is it set up in Phoenix.

The link was provided because your question was "which customers should and should not be paying the VAT" which implied that you did not "get that".
You set it up the same way as you have already done for 20% VAT i.e. set a Tax Class e.g. Zero Rate, configure a Tax Zone for that Tax Class to include the non-UK countries to which you ship, set a Tax Rate for that Tax Class i.e. 0% and the Tax Zone to which it will apply.

Edited by Heatherbell

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2 minutes ago, Heatherbell said:

The link was provided because your question was "which customers should and should not be paying the VAT" which implied that you did not "get that".
You set it up the same way as you have already done for 20% VAT i.e. set a Tax Class e.g. Zero Rate, set a Tax Rate for that Tax Class i.e. 0%, configure a Tax Zone for that Tax Class to include the non-UK countries to which you ship.

Thank you. Thats more help.


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1 hour ago, 14steve14 said:

I take it then that there must be some sql somewhere that makes the change.

yes, something like

UPDATE products SET products_tax_class_id  = Replace(products_tax_class_id , '0', '?')

change the question mark to whatever number it is (normal warnings about backups etc, apply here)

 

the other method would be to use easy populate, select tax class, so it appears in the download, then change it that way, then upload


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22 hours ago, puddlec said:

yes, something like


UPDATE products SET products_tax_class_id  = Replace(products_tax_class_id , '0', '?')

change the question mark to whatever number it is (normal warnings about backups etc, apply here)

 

the other method would be to use easy populate, select tax class, so it appears in the download, then change it that way, then upload

This getting ready for VAT is a nightmare not only with Phoenix. I have managed to change the custom invoice that I use to have the VAT element added plus the VAT number, that bit was easy. Also added the VAT number to the website address so that was easy. I have used mysql to change all the tax classes on a text site so that's good. I have created a PI module that shows text saying that VAT is included in the prices, which seemed like the easy way to do it as most sales are B2C and in the UK. I did try a module that shows prices with and without VAT but that messed with another module where I show MRRP and discounts, so hopefully thats is sorted.

Apart from having to use a new accounts package that works with MTD and hopefully a new payroll system, things are looking good. Just got to register now.

What else could I have possible missed.


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7 minutes ago, 14steve14 said:

What else could I have possible missed.

Remember to apply Tax Class to your shipping mods. Even though Royal Mail standard postage is VAT Exempt to purchase (although Signed For is Standard Rate), VAT must be applied to all P&P charges except when applied to orders consisting only of Zero Rate or Exempt products.


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3 hours ago, 14steve14 said:

Apart from having to use a new accounts package that works with MTD and hopefully a new payroll system

I use easybooks app on iPad, easy to use and is certified with MTD.

Payroll I use Basic PAYE Tools app available free from the gov.uk website.

2 hours ago, Heatherbell said:

VAT must be applied to all P&P charges except when applied to orders consisting only of Zero Rate or Exempt products. 

I'm not sure if that is correct.  P&P is a service you offer, regardless of products you sell, and (I think) is VATable at 20%.


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3 minutes ago, Mikepo said:

I'm not sure if that is correct.

I am sure It is correct:

Quote

VAT applies on delivery charges at the same rate as the VAT on the item. So you charge 20% VAT on delivery for goods that are 20% rated, and 0% for goods that are zero-rated.

 


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3 hours ago, Heatherbell said:

Remember to apply Tax Class to your shipping mods. Even though Royal Mail standard postage is VAT Exempt to purchase (although Signed For is Standard Rate), VAT must be applied to all P&P charges except when applied to orders consisting only of Zero Rate or Exempt products.

I was reading about this yesterday and its a bit confusing. Royal mail as a Universal Postage Service Provider are VAT exempt, but if the goods sold include VAT then VAT is charged on the postage. I have it as a note to ask the accountant next week to clarify.

I also have a note to add VAT to all the shipping mods. Loads of notes of things to do on the live site just before the change over so I hopefully will not forget.

 


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12 minutes ago, Heatherbell said:

VAT applies on delivery charges at the same rate as the VAT on the item.

True if just charging for delivery, but if you quote P&P, you are charging for a packing service which is VATable at the standard-rate.


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3 minutes ago, 14steve14 said:

Royal mail as a Universal Postage Service Provider are VAT exempt, but if the goods sold include VAT then VAT is charged on the postage

That is correct as I previously posted - you don't pay any VAT to claim back but have to charge it - that's the way it is.


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9 minutes ago, Mikepo said:

True if just charging for delivery, but if you quote P&P, you are charging for a packing service which is VATable at the standard-rate.

No, unless the packaging is considered "elaborate" e.g. a food hamper, gift box or gift wrapping or constitutes more than 20% of the product value. Basic packaging (e.g. bubble wrap and cardboard box) for the delivery of Zero Rated products is Zero Rated. We sell foodstuffs and have previously verified this with HMRC.


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4 minutes ago, Heatherbell said:

We sell foodstuffs and have previously verified this with HMRC

interesting, so do you have shipping modules for both 20% VATable and 0% VATable goods?

if so, you must have code to identify which shipping module to use with each product sold. Or am I just complicating matters?


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53 minutes ago, Heatherbell said:

No more complicated than VAT! 🙄

Dont say that. Its complicated enough as it is, or may be its because I am new to it. Last time I ran a VAT registered business was way back in the 80's so its changed a lot. Covid has a lot to answer for, either that or its my choice of businesses. I never knew selling into the model railway sector could prove so fruitful. Its all these people sat at home with nothing else to do. Still I am making the most of it whilst it lasts.


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3 minutes ago, 14steve14 said:

Dont say that.

Fortunately we have a good accountant that makes sense of it for us. MTD software (we use Sage) also makes VAT returns a breeze compared to how it used to be.


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