VAT on shipping

[Katie]

I have a new shop running in test mode at
http://www.rnsubmus.co.uk/acatalog/shop.htm

Can anyone let me know how to stop VAT being added to shipping costs?

I am using Actinic 7 with the latest patch downloaded.

Many thanks

[jont]

You can set the VAT rate under View | Business Settings | Shipping and Handling | Shipping and set to "exempt"

[Mike Hughes]

You probably shouldn't be doing this anyway as postage and packing charges for an item that includes VAT are also VATable.

We've been thorugh this a few times in the forum. See http://community.actinic.com/showthread.php?t=3081 and others.

Mike

Note: The full details on this can be found here: http://www.hmce.gov.uk/channelsPorta...yType=document

[jont]

Mike - think that has now changed - deliveries for personal (private) use are now non-vatable - orders to companies for corporate use are still vatable

[Mike Hughes]

have you any information on this. The most recent info I'm aware of is posted on the link in my post above. There no mention of any exemption for retail schemes.

Mike

[jont]

We were advised on this by our accountants who have audited us twice since then and nothing has been picked up and also a major audit by C&E last year (5 days of the cheery blighters sitting in the spare office) - again nothing was said against this and they check through EVERY invoice for the 12 months!

[chris ashdown]

My accountant says the postage and packing is a service and therefore should be charged for VAT

[steveaich]

Jont, a second request for further info, zero rating the postage could save us a significant amount of VAT per year. Thanks.

[jont]

Hi Steve - may be worth contacting your accountant to see where you stand as ours allow us to do it and C&E have audited us.

I read something in e-catalogue (a trade magazine) months and months back regarding this... something to do with mail order prurchases for private use are exempt VAT on deliveries.. we checked with our accountants and they confirmed this was the case.

Sorry, don't have the original article or anything in black and white so probably best to check with your accountants first

[Katie]

Thanks for all your help -will check what the accountant says. Some items (ie books) are zero rated but others are normal.

[Spark]

Hi - was just doing a search re Actinic Link and VAT and came across this post - hope this helps.

Current advise relating to VAT on P&P can be found in Notice 700/24 "postage and delivery charges".

I have just received the following telephone advise:

If you are selling zero rated goods then P&P is also zero rated. If you are selling custom rated goods, then P&P is also custom rated. If however, you are selling a mix of items it appears to get messy!! The delivery charge apparently needs to be apportioned - so if 50% of the order is on zero rated goods and 50% of the order is for custom rated goods then only 50% of the delivery charge would have VAT levied on it. It makes no difference at all who the deliveries are going to - only whether or not the items being delivered are vatable.

http://customs.hmrc.gov.uk/channelsP...00114#P41_3217

HELP!! I sell educational toys and learning aids, most of which are custom rated - I also sell books which are zero rated. How on earth do I sort out apportioning VAT on P&P within Actinic? Currently, I've just got a flat rate of P&P and VAT is added afterwards. Is this the same as setting the VAT on P&P in Actinic to Pro-rata?

Oh well - back to searching for Actinic Link........

[Spark]

Don't think that would work for me. P&P is £3.99 on all orders under £50 (currently free over £50). At the moment, VAT goes ontop of the £3.99 for all orders (initially done on the basis that it is a secondary service that I am providing the customer with) but with the info just provided by VAT office this isn't right. If the customer is buying a zero rated item and 2 custom rated items the VAT office said that I needed to apportion VAT on the P&P accordingly.

In Business Setting : Shipping & Handling I've got the shipping charged made tab checked. Then, the tax name is: VAT Custom; the Tax Rate is: pro-rata; the custom tax is: £0.00.

Will this automatically know that books, listed as zero-rated in mixed rated orders don't count towards the P&P VAT % ??

If not, it seems like a lot more admin to me, in this case for the sake of pence. Oh, to go back to blissful ignorance - a Christmas wish perhaps!

[Duncan Rounding]

Why don't you just add a note somewhere that states that 'for orders with different VAT rates the P&P is only charged on the higher VAT rate item' - that keeps it in the clear and nothing to apportion. You can't apportion something that is given for free.

[Spark]

Thank you Duncan

That works for me and covers mixed and custom rated items. I'll add a note to the T&C.

Probably a daft questions but with my current setting then, if a customer is only purchasing zero rated items, will P&P automatically be zero-rated too?

[cbarling]

Actinic can automatically do apportioning of VAT on shipping.

See View | Business Settings | Shipping and Handling | Shipping and then select "Pro-rata" on the tax rate drop down.

Chris