Consistent price for VAT and non-VAT customers

[bookworm]

I've been asked to implement a price structure that I think may not be possible but I'm hoping someone will prove me wrong.

What we want to do is charge the same price regardless of whether VAT is chargeable or not.

So, for example, a customer in the UK would pay £20 which would be the price including VAT. A customer in the USA would also pay £20 but their payment would be VAT exempt.

They also want the invoices to reflect whether the price is inclusive of VAT or not.

Any ideas on this would be appreciated.

Many thanks,

Bob

[chris ashdown]

If you managed to get this to work (god knows why) you would get a visit from HMRC every week wanting to check your figures out

Why not just have two sites the same one .com for the states delivery only and the other .co.uk for the UK only

If the average American cannot distinguish between the dollar sign and the pound, you may well be into loads of emails just servicing the states asking why you have charged double the price

[bookworm]

We're not charging double the price. We are charging the same price to everybody but for some people that price will be inclusive of VAT and for others it won't.

[pinbrook]

If the average American cannot distinguish between the dollar sign and the pound, you may well be into loads of emails just servicing the states asking why you have charged double the price

i think what Chris means is when Americans buy from UK sites they often assume its a US site and the prices are in $. Thus when they get their credit card ststements the price converted to $ is twice the expectated price.

This aside i think it is dodgy practice to charge the same price on one site to vat inc and Vat exc customers. 2 sites is the way to go

[Paul Bulpit]

may not be possible

I agree with Chris's view, and Pinbrook is also right, (simultaneous reply) but add......

Don't just consider the tax aspect, there's the currency sign AND the exchange rate (that's the 'double' bit, I think) to consider. The internet may be worldwide but that doesn't include the USA, have you seen some of THEIR websites? And their mobile phones were like bricks the last time I was there.


Two sites/domains suggestion - yourdomain.co.uk charges £20 including VAT (you receive £17.02 net).......... ship only to UK.

yourdomain.com is going to charge £20 (you say, no tax) - ship only to U.S.A., free of tax. But (trust me I've been there) those dozy Y*nks think that's ($)20 - remember, they're computers can't display the '£' sign and it isn't on their keyboard - so 'that's cheap' until you relieve them of $40 on their card then the fireworks start. They may also have to pay import duty & local sales tax on the parcel (not that I know anything about that).

I know: we email them to say 'please send us £20 via Paypal' and they send us $20 - which clearly isn't enough..... then we have to refund it....



Either way, how do you plan to cope with the shipping costs, have you really thought this through?




Expectated, now there's a good word I wish I'd thought of!

New thread please, what does it mean? Used to watch? (ex-spectated) or a variance on 'expectant' (that's a sort of cough-mixture isn't it?)

[john@stinkyink.]

I won't accept any orders from our Cousins over the Atlantic, you get more snotty emails from them than you need in a lifetime of running a business. They are arrogant and ignorant - that is of course purely my opinion. If we have the misfortune to receive an order from there it is an immediate refund and email telling that we are not allowed to ship to the USA by our insurance company!

[chris ashdown]

I know that for single items of clothing its no problem with the US Customs, but send more than a couple and they require details of where the cloth was manufactured, Where the Goods were Made, What type of cloth is used, What Type of weave plus a few others for each garment and spend up to two weeks stuck at us customs over a silly question you have already answered on the form but they don't understand

[bookworm]

Crikey, I seem to have opened up a few wounds here, which wasn't really my intention!

I've relayed back the basic gist of your replies and they have come back to me and explained the logic of what they want:

They say that, if we can set up a product with a gross price of, say, £20, people who are liable to VAT will pay £20 inclusive of VAT, whereas the non-vat customers will also pay £20 but that won't include tax.

Their argument is based on there being different rates of tax applicable to different people so the non-vat customers are paying a rate of 0% which would leave the price at £20 whereas a UK customer has 17.5% tax included in the price.

[chris ashdown]

Yes but somehow you have to prove to the vat man that a person from Uk has paid vat and this is shown in the accounts, whilst the person from say the states has not been required to pay vat all for the same product but has paid a higher price

Actinic is set up to either add vat to a product or not and also to enable you to be excempt from vat

It does not allow you to pick and choose anything else in the way of permutations as far as I know, and then if you got it to work as you say and were to do well, you would want to be able to automatically transfer the data to something like sage, which sounds like a nightmare

[john@stinkyink.]

We are set up for VAT free sales to the Channel islands etc, and it is always a problem getting the Sage Link to work with those invoices. But how you manage to make a Nett Price (VAT Free) equal to a VAT Inclusive Gross price for a different shipping destination boggles the mind!

[lefty]

My thoughts on all this for what it is worth (I have been running an e-commerce site for our business since 1999 and sell all round the world, currently about 15,000 orders a year with about 35% of total orders going to the US and 15% everywhere else outside UK, 120 countries last year) ...

We have always done our pricing the same for anywhere in the world as we have a printed catalog as well and it was just too messy to show 2 sets of prices or to have them net and ask customers to add VAT themselves if the were in the UK etc. Not really viable to have a different catalog for various VAT zones as people pass them on and we would forever be asking people for the extra VAT they should have paid (in my experience, if people have a chance to take the tax off they usually will!)

We charge a fixed rate for postage worldwide (shipping from tour UK warehouse) and consider the "VAT" that we keep on non-EC orders to be a contribution to the additional shipping costs.

It is easy enough to get Actinic to do the pricing that way - we use tax inclusive pricing and fiddle the templates a bit to just show the £ and $ price and no reference to tax - but not possible to do the VAT accounting stuff in Actinic. I use Access to produce the VAT audit trail reporting based on the delivery country and product VAT rate (we sell some books, zero rated) and have had to set up some additional linked tables to get it all working. We produce batch reports for daily order totals and post those as journals to Sage with the appropriate VAT and tax code totals then use Sage to do the quarterly VAT accounting. We have designed our own invoice reporting that shows the VAT included in the order for taxable zones.

I think this approach makes things simple for customers and we very rarely get any issues raised about VAT. The only ones we do get are occasional people in the Channel Islands saying they have been charged VAT and are not liable, so we refund it.

On dealing with Americans, I personally have not found any major problems. They have high demands and expect good service but if you offer that they are on the whole friendly and appreciative of what we are doing. I get an occasional issue with currency conversion - we show £ and $ prices on the site but clear all payments through a UK Sterling merchant account so the amount they see on their card statement can be a few cents different to what shows on their order confirmation in Dollars. We try to explain that on the site to pre-empt questions and if it does come up we have a standard email to explain it and all is OK. We also sometimes have geographically challenged customers who complain on the day after placing their order that they have not receive it yet, but a link to Google Maps normally does the job (lol).

As the US web market is so much bigger than the UK one, we certainly would not ignore it.

Having said all that, I do have a plan to set up a parallel site at some time on a .com domain just for sales to America - with Dollar pricing only, linked to a Dollar merchant account and with US language throughout to make them feel more at home.

Hope these ramblings help someone!