UK taxes (VAT) in Ecwid

If you’re a UK merchant, you’re most likely required to charge VAT in your home country. This may be one universal tax rate, or you may need to apply different taxes for different products. In case you sell cross-border (to the EU or other countries), you may also need to use different tax rates for your foreign sales.

Ecwid allows you to set up your store in accordance with the tax rules of your sales regions.

Entering prices with VAT taxes included

In the UK, customers expect to see prices in your store with taxes already included. To comply with this rule, make sure “gross prices” are selected in your store admin.

To choose gross prices:

  1. From your Ecwid admin, go to Settings → Taxes & Invoices.
  2. Click Change Pricing Settings:

    UK_Taxes_clean__1_.png

  3. Choose I enter prices with taxes (Gross prices).
  4. Click Save.

That’s it! Now taxable customers will see all product prices and fees, such as shipping, in your store with taxes already included.

Setting up taxes

If you’re a VAT-registered business, you must charge VAT on the goods and services that you sell. The easiest way to handle taxes in Ecwid is to enable automatic taxes. This way, your store will calculate the tax rates automatically based on the store and customer's location.

To enable automatic taxes in your store:

  1. From your Ecwid admin, go to Settings → General → Store profile and add your actual company address.
    Make sure you don't have any spelling mistakes or extra spaces in the address.
  2. Then go to Settings → Taxes & Invoices and enable automatic tax calculations:

    UK_Taxes_clean__2_.png

Once the automatic tax rates are enabled, your store will charge a precise tax rate on each order depending on where you and your customer are located (e.g., a 20% tax rate for customers from the UK and a zero tax rate for customers from the EU). Ecwid stays up to date on the current rates, so, even if they are changed, your store will automatically use the new rates with no actions required from your side.

With automatic taxes, the same standard tax rates apply to all the products in your store. In case you need more complex taxation, you can configure your taxes manually.

We recommend disabling the automatic taxes and setting up manual taxes instead, if:

  • you are required to charge a reduced tax rate
  • you have zero-rated products in your store
  • you need different tax rates for different types of products
  • you need to set up some special taxes in specific regions, zones, or countries

See the instructions on how to set up manual taxes and learn more about product-specific tax rates →

If you’re not sure whether you need manual tax setup, consult with a tax professional.

Handling tax-exempt customers

Some of your customers may be tax-exempt (e.g., they are charitable organizations). You can mark them as such on the My Sales → Customers page in your Ecwid admin. This way, these customers won’t be charged taxes when buying from your store.

Learn more about tax-exempt customers in Ecwid →

Creating tax invoices

You can generate tax invoices for your orders. These tax invoices are legally compliant and meet the standard invoicing requirements for the UK. There are two types of tax invoices available in your Ecwid admin: regular invoices for your sales and cancellation invoices for your refunds.

To preview an invoice that can be generated in your store, go to Settings → Taxes & Invoices → Tax invoices → Contents of tax invoice (the preview is available once the invoices are enabled for your store).

You can always create a tax invoice for an order in your Ecwid admin, on the page of the order in My Sales → Orders:

UK_Taxes_clean__3_.png

All the invoices that have been created for a particular order are available in the Tax invoices section on the page of this order. If needed, you can also download all the invoices for a certain time period in bulk.

If you are using Ecwid’s tax invoices, you can also add your UK VAT registration number to the invoice. See the instructions on adding your tax registration number →

If you don’t need tax invoices or you are making VAT invoices via a third-party system outside of Ecwid, you can turn off Ecwid’s tax invoices in Settings → Taxes & Invoices → Tax invoices.

Read more about Ecwid’s tax invoices in our article →

IOSS and import into the EU

If you sell to the EU, you are affected by the new EU rules on cross-border VAT for e-commerce. These rules are effective after July 1, 2021, and state that all the goods that are to be imported into the EU are subject to VAT.

This means that either you should charge your customers VAT at checkout (it’s allowed if the order is below €150 and if you register with the Import One Stop Shop (IOSS), or customers will be charged when receiving their order in the EU.

Learn more about the new EU VAT rules →

Currently, you can let your EU customers pay VAT for all the orders in your Ecwid store when the goods are imported into the EU, or — if the orders in your store never exceed a €150 limit — you can set up manual tax rates to charge customers a VAT of their country at checkout. 

To inform your customers that they will need to pay VAT when receiving their order, you can put a notice on the checkout page. For this, you can use the free Checkout Notices app from the Ecwid App Market. The Checkout Notices app allows you to add any notice to one or multiple checkout pages.

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