Tax Rates

To add a specific tax rate, follow these steps:

1. Go to Products > Tax Rates in the IRP Admin left navigation menu.
2. Click the Add Specific Tax Rate button at the top of the page.
3. Enter or edit the following details in the Add Tax Rate lightbox:

   Setting	Description
   Country	The country to which this tax rate should apply.
   Category	The category to which this tax rate should apply. If you select << Default Rate >>, this tax rate will apply to all categories that do not have a specific tax rate set, for this country.
   Rate (%)	Enter the value of the tax rate. This must be a valid numerical value.

4. When you have entered all of the details, click the Add Specific Tax Rate button.
5. You must click the 'X' button to close the lightbox and reload the page.

To edit a tax rate, follow these steps:

1. Go to Products > Tax Rates in the IRP Admin left navigation menu.
2. Use the Search bar to filter what tax rates are displayed. This will allow you to find the specific tax rate or rates that require updating. You can filter by country and/or category.
3. When the tax rates are displayed, change the value in the Tax Rate (%) column. You can edit as many tax rates as necessary in this way.
4. When you have made your changes, click the Update Tax Rates button.

To delete a tax rate, follow these steps:

1. Go to Products > Tax Rates in the IRP Admin left navigation menu.
2. Use the Search bar to filter what tax rates are displayed. This will allow you to find the specific tax rate or rates that you want to delete. You can filter by country and/or category.
3. When the tax rates are displayed, check the Delete box beside the rates that you want to delete. You can select as many tax rates for deletion as necessary in this way.
4. When you have made your selection, click the Delete Selected Tax Rates button.

Note that any changes made here will be reflected in the Tax Rates section of the relevant Shipping Country on its ShippingCountryEdit.aspx page.

To schedule changes to tax rates, follow these steps:

1. Go to Products > Tax Rates in the IRP Admin left navigation menu.
2. Click the Scheduled Tax Rate Changes button at the top of the page.
3. On the TaxRateChangeSchedules.aspx page, click the Schedule New Change button. This opens the TaxRateChangeScheduleEdit.aspx window:

4. Enter or edit the following details:

   Setting	Description
   Countries	Select the country to which this scheduled tax rate change should apply.
   Category	Select the category to which this scheduled tax rate change should apply. If you select << Default Rate >>, this tax rate will apply to all categories that do not have a specific tax rate set, for this country.
   New Rate (%)	Enter the value of the new tax rate. This must be a valid numerical value.
   Time Of Change	Use the date picker to select a date and enter the hour and minute for the scheduled change. Important: the time you pick will be the time according to your Admin User account time zone. If necessary, you can find and change this on the AdminUserEditMyDetails.aspx page in the 'Other Account Settings' section. For more information, see the Admin Users help topic.

5. When you have entered all of the details, click the Schedule Tax Rate Change button. You should see a message that states Change schedule successfully added.
6. You must click the 'X' button to close the window and reload the page.
7. The scheduled tax rate change will now be listed in the grid on the TaxRateChangeSchedules.aspx page which you can see by clicking the Scheduled Tax Rate Changes button at the top of the TaxRates.aspx page. The page appears as follows:
   
8. To make any further changes to the schedule, click the Edit button.

Tax Rates vary according to the country in which you are domiciled. Taking the UK as an example, the current standard VAT rate for most goods is 20%. Some goods are charged at a reduced rate of 5% (such as children’s car seats and some mobility aids) and other goods are charged a zero VAT rate (such as books and children’s clothes).

Tax Rates are simple to configure in the IRP. There are only a few sections of the Admin that you need to deal with.

Default tax rates and category-specific tax rates

You configure your Default Tax/VAT Rate and Category-Specific Tax Rates in one of two places:

1. Under Shipping > Shipping Countries (ShippingCountryEdit.aspx). In the Tax Rates section you provide two values:
   • Default Tax Rate: This is the Default Tax Rate for a country, to be applied to all non-specified product categories. If a country is tax-exempt, enter 0 for this setting.
   • Category Specific Tax Rate: Category Specific Tax Rates allow you to enter tax rates for categories. For example, children’s clothing should have a Tax Rate of 0% in the UK instead of the default UK Tax Rate of 20%. If a Category Specific Tax Rate exists and a customer has one or more products that belong to this category in their basket, the Category Specific Tax Rate will apply to these items rather than the Default Tax Rate.
     To add a specific Tax Rate for a Product Category, select the Product Category from the drop-down list and enter a valid numerical percentage Tax Rate value. Click the button to save the Category Specific Tax Rate.
     You can find a list of goods and services with reduced Tax Rates for the UK here. (See the Shipping Countries help topic for more details.)
2. Under Products > Tax Rates (TaxRates.aspx): Again here you can set specific rates for individual categories and countries. (See the main Tax Rates help topic in this section for more details.)

Shipping Methods

You can also define a Shipping Method as being taxable or non-taxable on the ShippingMethodEdit.aspx page. In the vast majority of cases, a Shipping Method will be taxable. In the case of Royal Mail in the UK however, this should be false. Changing the Carrier will set this value to false if a Royal Mail integration type is selected.

If a Shipping Method is defined as taxable, then the appropriate Tax Rate will be applied to the cost of shipping when an order is made using this Shipping Method. This Tax Rate will be determined by the default rate of the destination country.

NOTE: The price you set in the IRP will be the price charged to the customer. For example for a shipping rule that charges £5.00 to the customer this means “£5 inclusive of VAT” and so:

• To a country that is VAT-free, the price the customer will see is £5.00 and £0.00 VAT will be accounted for.
• To a country that incurs VAT at 20%, the price the customer will see is still £5.00 but the IRP will account for £0.83 in VAT (5 - (5/1.2) = 0.83).

Application Settings

You can define the following tax-related Application Settings in the IRP:

• Allow User Vat Status Changes: This setting allows users to see the price of their items with or without any sales tax added. This is useful if you have business customers who will be more interested in the price without tax. By default, all prices are displayed with tax included.
• Tax Pricing Display: This setting defines how prices are displayed as default on the website, either 1 or 2. ‘1’ means that prices will be displayed inclusive of VAT; ‘2’ means that prices will be displayed exclusive of VAT.
• Vat Rate: The Default Tax Rate in the system used when no Default Tax Rate has been set up on the Products > Tax Rates page.
• Always Deduct VAT From RRP When VAT Free: When you check this box, Tax/VAT is always deducted from RRP values for Tax/VAT-free countries. When this box is unchecked, RRP values are displayed as normal.

It is important to understand that tax is calculated on the level of each individual item in an order and not on the order total. Therefore if an order contains, for example, three items, the tax on item one is added to the tax on item two and then the tax on item three. The total tax is then added to the total cost of the items. The order total will then include the cost of the shipping (if any) and any tax on the shipping (if applicable).

This explains why you may see a discrepancy of a few pennies if you try to calculate the tax on the order total, as this will be due to the rounding up or down of decimal places on the tax at item level.

Here are some examples to illustrate how tax calculations are constructed in the IRP:

Example 1:

• Single item excluding tax = £32.48.
• Shipping Method is Royal Mail 2^nd Class delivery to UK which is free and, because it is Royal Mail, is non-taxable.
• VAT (20% of 32.48) = £6.50.
• Order Total (32.48 + 6.50) = £38.98.

Example 2:

• 2 of the same items from Example 1 excluding tax (32.48 x 2) = £64.96.
• Shipping Method is Royal Mail 2^nd Class delivery to UK which is free and, because it is Royal Mail, is non-taxable.
• VAT (6.50 (the cost of the single item as shown in Example 1) x 2) = £13.00.
• Order Total (64.96 + 13.00) = £77.96.

Example 3:

• Single item excluding tax = £214.99.
• Shipping Method is Royal Mail Special Delivery to UK = £12.20 but, because it is Royal Mail, is non-taxable.
• VAT (20% of 214.99) = £43.00.
• Order Total (214.99 + 12.20 + 43.00) = £270.19.

Example 4:

• 3 of the same items from Example 3 excluding tax (214.99 x 3) = £644.97.
• Shipping Method is Parcelforce Express 24 to UK = £19.15 and, because it is Parcelforce, this is taxable.
• VAT (43.00 (the cost of the single item as shown in Example 3) x 3) (20% of 19.15 (Parcelforce Tax (3.83)) = £132.83.
• Order Total (644.97 + 19.15 + 132.83) = £796.95.