VAT on delivery?

Laurafyp · #1 30-06-2009, 08:05 PM

We are having to register for VAT and are just figuring it all out, but the thing we are not 100% sure on (although hopefully the accountant has figured it out in his head now!) is postage fees. We currently charge £2.95 for orders under £50 for UK, variable rates for EU, and our agents pay a flat rate of £3.95.

Are postage fees VATable?

Im thinking possibly, but then as most of our products are 0% rated surely an order with all 0% rated items in it wouldnt then pay VAT on postage?

#2 30-06-2009, 08:08 PM

If all the products you are sending are 0% rated, then you do not need to charge VAT on shipment.

Laurafyp · #3 30-06-2009, 08:51 PM

But some of the products are 15% VAT- so presumably any order with one of these products in would have a VAT charge on the postage fee...

Hmmm I wonder if my ecommerce package is set up to handle that.......

#4 30-06-2009, 08:59 PM

If the order is mixed (0 & 15% items), then you can proportion the amount of delivery that you charge VAT on and obviously you need to fully charge VAT on any deliveries that are purely 15% rated items.

Not sure that many e-commerce packages are set up to handle it all correctly.

Do shout if you need any other VAT help.

Maslins · #5 30-06-2009, 09:02 PM

Not sure I agree...though I'm no expert in this field.

I think delivery is standard rated (ie currently 15%) regardless of what you're selling.

Unless you definitely know you're right Troy I think you might be getting confused with partial exemption, which is where some of your sales are standard rated and others are exempt (NB exempt, not zero rated).

Happy to hear other people's thoughts on this and happy to be corrected, but I think you charge VAT on delivery irrespective of what your customer purchases.

#6 30-06-2009, 09:05 PM

I am pretty sure of myself on this Chris.

Maslins · #7 30-06-2009, 09:13 PM

Quote:

Originally Posted by Troy

I am pretty sure of myself on this Chris.

I stand corrected as this proves.

fantasycouriers · #8 30-06-2009, 09:19 PM

From memory, you are supply a service, and the service of posting and packaging is a standard rated service, vatable at the standard rate. Even if you are simply charging postage costs per the royal mail with no packaging charged.

The only way around it I think is to seperately invoice for postage on its own.

I used to operate a margin scheme, and the postage element had to be vated at standard rate, which made it all a bit of a pig.

Edit;Memory is a crap thing to rely on

VAT on delivery?

Accounts, Finance and Tax Affairs