Big Tax Problem

[MikeyG]

Hi,

I am trying to go live with VAT in the UK. I am running version 1.3.7 and due to time constraints not yet been able to upgrade.

Now having hit VAT threshold I have gone to set up products but........big problem.......


VAT rate 17.5%

set net price to £45 gross shows as £60.75 - should be £52.88

Set view prices to display with admin including tax then on the product list shows as £52.88 but go into the product and still shows £60.75

Set gross to £45 Net shows as £33.33 but in the product list shows as £39.16.

I actually want pricing to show as gross thoughout the site but having set display prices to include tax it is not showing this.

All shown at Net.

What could have gone so wrong here?

Thanks

MG

[schoolboy]

There could be a number of reasons for this, but typically it happens because somewhere it is ADDING or COMPOUNDING two (or more) tax rates together.

On an original install of ZC, a tax class called "Taxable Goods" is represented, and if you look at this under:-

ADMIN>>>LOCATIONS/TAXES>>>TAX CLASSES

... it's ID is "1".

Now look at the Tax Rates for this class:-

ADMIN>>>LOCATIONS/TAXES>>>TAX RATES

... it has a default PRIORITY of "1", a default zone of Florida, and a default rate of 7%

-----------------------

Now, if you are in the UK, it's likely that you have set up an additional TAX CLASS, or Tax Rate, possibly called "UKVat", or perhaps just "Vat" - or whatever.

Now, the TAX RATE for this "Vat" class is 17.5%, which you set under:

ADMIN>>>LOCATIONS/TAXES>>>TAX RATES

It is very important now to give this a different PRIORITY number. As shown above, "Taxable Goods" has a priority of "1". You should give "Vat" a priority number of "2".

Tax calculations are based on the adding of rates within the same PRIORITY group, and compounding the rates when the priority numbers are different. I think this is what's happening on your site.

Furthermore, when you set up your products (in the Product Edit Screen), make sure to select "Vat" as the tax class from the appropriate drop-down.

As you are in the UK, selling only to the UK, then you could REMOVE all other tax classes and have just the ONE tax class. This will fix your problem.

[MikeyG]

Schoolboy I think you are right, I have set up a tax zone of Europe which I wanted to use for taxing items for Sales shipping to the EU Countries. It has the same priority, but UK was not in the list. Should this not work? i.e. if the shipping address in Europe it works out a tax rate for the Zone .

If this is the problem can you recommend how I set up VAT to cover UK and Europe. i.e. VAT at 17.5% needs to be paid by non VAT registered consumers and businesses in Europe. Should I actually just have one zone with UK and European countres listed?

Thanks

MG

[schoolboy]

Should I actually just have one zone with UK and European countres listed?

Thanks

MG

Yes, I think this will help. Try it.