BREXIT UK VAT collection

  • Resolved DensitySK

    (@densitysk)


    3 years, 10 months ago

    Dear all,

    do you have any updates in plan to address issues around UK BREXIT and the signed deal?

    In particular it is required, that any EU business selling goods or services to UK based customers must collect the UK VAT at the point of sale and report it to HMRC

    HOWEVER there is an threshold of 135,- GBP

    That means that orders with value up to 135,- GBP UK VAT must be collected by the woocommerce shop

    For orders above 135,- GBP zero VAT is charged and it must be collected by the shipping company upon delivery to the UK customer (standard procedure for all shipments outside of EU).

    THE PROBLEM IS:

    In Woocommerce there is no option to set a limit to charge i.e. 20% VAT for orders up to 135,- GBP and zero VAT above that value.

    Especially problematic is, that the VAT record must be kept and submitted in GBP currency for HMRC reporting purposes. Hence Woocommerce stores that operate with EUR or any other currency must show or somehow keep a record of GBP versus main currency exchange rate, that was valid for that particular date when the order was placed.

    Since this is a VERY important change for all EU businesses, I believe that it should be implemented in the Woocommerce itself by default and not via som third party solutions.

    Source here:
    https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021?dm_i=9BK,76QJE,WE5NMK,T48J5,1

    Regards
    Michal

Viewing 3 replies - 16 through 18 (of 18 total)

  • Hi again!
    So, imagine product A that costs 77 GBP and product B that costs 80GBP:
    if I add to cart 2X product A (154GBP) or 2x product B (160GBP), I get both prices + 20% Brexit VAT;
    if I add product A + product B, I get 157 GBP + 0 % tax.

    So in the first situation, I have to add up 1 product A to the cart and then remove it again for the rule to workout.

    In the second situation all is fine.

    • This reply was modified 3 years, 9 months ago by lucius777.

    Hey again guys, specially you @jarwu, I hope maybe you can help out;
    So I’ve solved the other part (I was forgetting that calculations were made before tax).

    But now I encountered another issue.
    The rules apply but when it surpasses the 135 gbp limit (I’m also using the currency switcher plugin), tax appears correctly (Tax free) but the price of each product also changes. For instance:
    I have a product that is 83,75 GBP before tax;
    When someone makes an order of 1 product only, the client pays 83,75GBP + 20% brexit tax = more or less 101 GBP;
    When someone buys 2 products, the item price is 2 X 103,50 GBP which is the item price we collect here in Portugal (83,75 GBP + 23% tax) = 103,50 GBP)

    So the rule applies since the order is tax free, but the item prices are collected with 23% VAT… I have my shop with shipping address price/tax calculation, prices including VAT and products displaying with VAT included; I have standard rate for EU countries and 20% Brexit tax for the UK and zero rate (for every country that is outside of my European zone. Maybe could this be the issue? What I am missing?

    Thanks for your attention and help would be really appreciated!
    Cheers,

    • This reply was modified 3 years, 8 months ago by lucius777.
    • This reply was modified 3 years, 8 months ago by lucius777.
    • This reply was modified 3 years, 8 months ago by lucius777.
    • This reply was modified 3 years, 8 months ago by lucius777.

    Hi,
    I don’t know why you have that situation. Try to check in VAT setting your VAT rates, and “names” of that groups. For transactions with UK you should to set in VAT rates standard 20% and in “zero-rate” group which name is used in algorithm , for Uk it should be set as 0%.

    function apply_uk_zero_tax_rate( $cart ) {
    $VAT_limit_UK = 135;

    $customer_country = WC()->customer->get_shipping_country();

    foreach ( $cart->get_cart() as $cart_item ) {
    $subtotal += $cart_item[‘line_total’];
    }

    if ( ($customer_country != ‘GB’) || ( ($customer_country == ‘GB’) && ($subtotal <= $VAT_limit_UK) ) )
    return;

    foreach ( $cart->get_cart() as $cart_item ) {
    $cart_item[‘data’]->set_tax_class( ‘zero-rate’ );
    }
    }
    add_filter( ‘woocommerce_before_calculate_totals’, ‘apply_uk_zero_tax_rate’, 10, 1 );`

Viewing 3 replies - 16 through 18 (of 18 total)
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