UK VAT should be 0% for all customers

The VAT applied to customers is determined by WooCommerce, based on the rates configured at WooCommerce > Settings > Tax. If you wish to apply 0% VAT to customers from a specific country (e.g. UK) you can simply enter 0 for that country, in the appropriate tax class.
Please note that the EU VAT Assistant doesn’t change the VAT rates entered in WooCommerce by its own accord. We deliberately avoided adding that kind of automatic updates to the plugin, so the rate “being set back to 20% almost immediately” is not something that our plugin does.

If you enter a rate of 0% for the UK, it will stay that way, unless one of the following happens:
1. You manually set the VAT rate back to 20%.
2. You click on the “load VAT rates” button, at the bottom of the tax class page. That operation replaces all the rates with the default ones, overwriting any manual change. Note: that button should only be used during the initial setup of the plugin, as a convenient method to load the rates for EU countries. After that, it’s best to just update the rates manually.
3. Some other element (e.g. another plugin) updates the VAT rates automatically. As mentioned, the EU VAT Assistant doesn’t do that.

We can’t say what element is actually replacing the rate, but that should be easy enough to find out, going by exclusion. If you’re using any service to automate tax rates, that would be the first one to check.

Additional notes,
We are not tax advisors, nor accountants, therefore what follows doesn’t constitute legal advice, nor tax advice.

Based on the information we have, the following might not be correct:

My accountant informs me (in very forceful terms) that I (operating in The Netherlands) should not be collecting ANY VAT from ANY customers, business or private, in the UK

We had extensive conversations with the UK Revenue, who clearly stated that VAT must be applied to any sale made to UK consumers, when the amount for goods is under 135 GBP. In case of services, such as digital products, VAT applies regardless of the amount if a customer is a consumer.

The following site explains this in simple terms: https://www.avalara.com/vatlive/en/vat-news/brexit-uk-vat-for-eu—us-ecommerce-sellers.html

We would recommend to double check the above, directly with the UK Revenue. Businesses that are expected to charge VAT could risk to be contacted by the UK Revenue Office, and have to pay the amount that they expected to be charged.

Reference about tax calculation issues: https://www.ads-software.com/support/topic/faq-taxes-are-not-calculated-correctly/

• This reply was modified 3 years, 4 months ago by Diego. Reason: Added link to post about tax calculation issues

Thank you for your explanation.

It would appear that the culprit is Aelia Currency Switcher, at least when that is deactivated I can set VAT to 0%, when it’s active it keeps switching back to 20%. Unfortunately I need Currency Switcher as well ??

I will pass the links for the VAT explanations on to my accountant…

As the architect behind it, I can say for certain that the Aelia Currency Switcher has nothing to do with the issue, as that plugin has no relation to taxes at all. It doesn’t calculate taxes, nor read, write or change tax rates.

The same applies to any other Aelia plugin: we deliberately avoided implementing any feature related to tax calculations, or tax rates. None of our plugins contains any code, of any kind, that could possibly change the rates “under the hood”.

Due to that, I can guarantee that the issue has to be found elsewhere. Perhaps it’s some other plugin, or some custom code, that just happens to run when the Currency Switcher is active, but it’s not our plugin that changes the tax rate. I have absolutely no doubt about that. ??

For completeness of information, if you wish to set VAT as 0% for a country you can simply remove the corresponding row from the tax class. If there isn’t a row with a VAT rate matching a country, WooCommerce automatically applies no tax to it.

Configuring taxes is outside the scope of our plugins, as well as our service. You can find more information in the official documentation: https://docs.woocommerce.com/document/setting-up-taxes-in-woocommerce/

I had tried that but it just kept re-appearing….

I have done some more extensive testing now and found that the real culprit seems to be the WooCommerce Automated Taxes. At least if that is enabled then the list of taxes get updated with the VAT for the town/postcode every time I fill in an order. If I disable it I can delete the main GB lien and it seems to stay deleted. Of course I have no idea what I’ve lost by turning that off though!

Thanks for your help and suggestions though.

Thanks for the update. What you describe makes sense. The automated taxes service should have the purpose of updating tax rates automatically, without human intervention. The benefit of such a solution is that, if the rates change, they will be updated automatically. However, this is also has the downside that, if one needs to keep only some rates up to date manually, but not others (e.g. GB must be left at 0%), this could become tricky.

It could be a good idea to contact the support team for the automated taxes feature, to see if there could be a way to let you keep the VAT for GB to 0%. If not, then it would probably be better to keep the rates up to date manually.

This is precisely the reason why decided not to implement such kind of feature in the EU VAT Assistant. There are too many combinations of elements that determine the VAT rate applicable to an order, and we found that the most reliable way to get the correct result is to let the merchant set the rates as they like, without any automatic update.

Thanks Diego,
I did post a question / suggestion on the WooCommerce forum last night. It would be nice if they had an Override list so that you could have all the (presumed) advantages of Automated Taxes but with a few overridden rates that the WooCommerce update would ignore.

Indeed, having partial automation of tax rates would be a great option. Even better if one could specify which rate to take for each country, because some countries have different rates for the same class of products.
For example, at one point, ebooks were taxed at a standard rate, reduced rate, or exempt, depending on the country. Due to that, a “blanket” update, based only on the standard rate/reduced rate criteria would not have worked.

I’m glad I’m not a Tax accountant!! I have a hard enough time doing my ‘real’ work without having to try to understand all this Rates stuff.