Why might tax not be applied to shipping?

Resolved cycas
(@cycas)

3 years, 7 months ago

Our UK website https://www.shopontheborderlands.co.uk/ needs to charge VAT on products that are not zero rated that are bought by customers in the UK and the EU. It also needs to charge VAT on shipping for those customers.

Most of our 11,000+ products are zero rated (books). Since editing all of those records was an impossible task, we set up a custom tax class called VAT, and applied that to the 1,500ish items to which VAT applies.

This works. Customers in VATable locations that buy VATable products have VAT shown against the relevant product lines: zero-rated products have no VAT.

But I can’t get VAT to be applied to shipping, and I can’t work out why.

Most of our shipping is not liable for VAT, but orders from inside the UK & EU countries, where the order contains a VATable product are.

Whatever I do, my shipping doesn’t show any VAT. I have set the shipping options to Taxable, and I have the shipping tickbox ticked against all the country codes in my Additional VAT rate.

The page I need help with: [log in to see the link]

Viewing 4 replies - 1 through 4 (of 4 total)

Plugin Support mouli a11n
(@mouli)

3 years, 7 months ago

Hi there,
Please can you confirm that you have a tax rate set up to charge VAT on the cart items and that it is set to charge VAT on Shipping as well.
This needs to have the correct country set up as well.

Link to image: https://d.pr/i/Hk1jAU

Please can you also check the settings under WooCommerce ➔ Settings ➔ Tax to check that shipping tax is based on the cart items.

I also suggest that you set it to itemize tax items as this might help you figure out what is happening:

Link to image: https://d.pr/i/R9DDZ8

I hope that helps you to figure it out.
Feel free to get back to us if you have further questions.

Thread Starter cycas
(@cycas)

3 years, 7 months ago

Hi! Thanks so much for replying.

Yes, I have a tax rate set up that applies to shipping, as shown, though since the majority of our products are not subject to VAT, the VATable items have an Additional tax class, it’s not in ‘standard’.

I have tax rates set up for every EU country. The UK country code is GB, I cannot enter it as ‘UK’, it corrects to GB.

Yes, my shipping class is based on cart items.

If I set the tax totals to Itemised, I can see that the shipping on items where VAT is applied is not being taxed. My tax report says that I have had three orders so far this month to which VAT applied, and that my shipping tax is zero.

Plugin Support John Coy a11n
(@johndcoy)

Automattic Happiness Engineer

3 years, 7 months ago

Hi @cycas

To confirm, you’d like to not charge shipping on the items assigned to the VAT ( Zero Rate ) tax class but you’d still like to charge taxes on the shipping costs, is that correct?

If so, it will not be possible to achieve this unless a taxable item is included in the cart to qualify shipping to be applied to another tax row other than those with a zero rate.

The other option would be to create shipping methods specific to carts only containing zero tax products. To show or hides methods based on cart contents, you can use Conditional Shipping and Payments

I hope that helps!

Plugin Support Missy a11n
(@m155y5)

Automattic Happiness Engineer

3 years, 6 months ago

We haven’t heard back from you in a while, so I’m going to go ahead and mark this thread as resolved. If you have any other questions please feel free to start a new thread.