UK VAT ISSUE

  • Resolved scph35003

    (@scph35003)


    3 weeks, 1 day ago

    Ive been trying to figure this out for a long time and cant seem to find the issue

    I need to charge 20% VAT for all my customers (UK). I have set up the rules ok 20% and that i want to include VAT in my prices

    My website seems to be charge VAT twice. It appears to be charging a total off an already charge product? very confusing so let me do an example

    I have a product thats ￡10. The amount of VAT that should be charged is ￡2 (￡10-20%=￡8 (￡2 VAT))
    I want to invlude VAT in my pricing, not add it on.

    However on the basket and checkout, its only ￡1.67 VAT being charged (not ￡2)

    It seems as that its doing the following calcaulation. ￡10 – 20% = ￡8 then taking another 20% off resulting in ￡1.6x

    If i alter my settings and exclude VAT from pricing and stick it on at the end it works perfect. ￡10 + 20% = ￡12
    what is happening?

    Can anyone help?

    • This topic was modified 3 weeks, 1 day ago by scph35003.
    • This topic was modified 3 weeks, 1 day ago by scph35003.
Viewing 5 replies - 1 through 5 (of 5 total)

  • You are calculating wrong.
    10 / 1.20 = 8.333 period.
    So taxes from 20 are 1.66 period, rounded 1.67

    • This reply was modified 3 weeks, 1 day ago by chris2201.
    Thread Starter scph35003

    (@scph35003)

    Hey Chris, sorry im confused. Do the sum in a calculator ￡10 – 20% ? you should get ￡8 right?

    You’re working it out wrong:

    You add 20% of the EXCLUDING Tax price to get to ￡10 – so ￡8.33 + 20% (￡1.67) is correct.

    Try this: https://www.vatcalculator.co.uk/

    Right. But this is not what you want.
    Some maths:
    which base amount (x) + 20% (x*0.2) equals 10?
    x + x*0.2= 10
    1.2x=10
    x=10/1.2
    x=8.33333

    Calculating taxes is always: price without tax + price without tax multiplied with taxrate equals price including taxes. pwt + pwt*tr/100 = pit
    Your product is 8,- without taxes. Taxrate is 20% (10/100 = 0.2) from 8.-. This is 1.6 So your price incl. tax is 9.6
    Or: 8*1.2

    Plugin Support Jonayed Hosen (woo-hc)

    (@jonayedhosen)

    Hi @scph35003 !

    I completely understand how challenging it can be to navigate VAT settings. Let’s break it down by looking at your current VAT setup.

    From what you’ve said, you want to set a price of ￡10 for your product, which includes a 20% VAT. However, instead of showing the expected ￡2 in VAT, your checkout is showing only ￡1.67. This happens because WooCommerce calculates VAT based on whether you include it in the price or not.

    When you set prices to include VAT, WooCommerce sees ￡10 as the final price. It then figures out the tax part. Here’s how it works:

    • The base price is calculated as ￡10 ÷ 1.20 = ￡8.33 (the price before tax).
    • The VAT is then ￡10 – ￡8.33 = ￡1.67.

    I would also suggest checking our Tax guide, which will give you more insight into tax and its settings: https://woocommerce.com/document/setting-up-taxes-in-woocommerce/#prices-entered-with-tax

    I hope this helps clear things up for you! If you have any more questions, feel free to ask.

Viewing 5 replies - 1 through 5 (of 5 total)
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