VAT on postage problem

[Lee_Wallis]

I have 2 products in my shopping cart. Product one is £22.50 and Product two is £24.00. The shipping for both products is £10.00. Therefore the total (before VAT) is £56.50.

Now, we don't charge VAT for Product one, but we do charge VAT for product two.

However...

The shopping basket works out the total VAT as £5.10 and the total as £61.60 - this is wrong. The VAT should be £5.95 and the total should be £62.45.

It is only working out the VAT for the shipping as £0.90 when it should be £1.75.

Surely there must be an option somewhere to add VAT to the postage for a product, even if that specific product isn't vatable?

[Duncan Rounding]

The VAT on the shipping costs are assumed to be apportionate to the taxable amount in the basket.
ie (24/(22.5=24))*10*0.175=0.90
which IIRC is what the VAT regs say to do.

[Lee_Wallis]

Is there no option to make the full postage cost vatable at all times, even if one of the products exclude vat?

The reason is because my customer prints her invoices off a different piece of software instead of Actinic and is comes up 85p short, because it obviously includes the full postage amount in vat.

[Duncan Rounding]

Not that I know of - I would suspect it would require some perl hacking. I think her other software could be overcharging.

[Lee_Wallis]

I just discovered that by selecting "Zero-Rated" on the product instead of "Custom" as £0.00 tax that it sorted the problem!

Weird, but actinic is weird.

[Duncan Rounding]

An interesting thing to remember. Presumably there's reasoning behind it...