Since Brexit, the United Kingdom (UK) government requires a 20% value-added tax (VAT) to be paid for all international orders below or equal to £135. They require all merchants to pay this via a registration with the UK HM Revenue and Customs. Orders with a higher amount are shifted to the consumer.
Lightspeed eCom has been designed to automatically charge the 20% VAT on orders less than £135.
eCom determines whether an order is below or equal to the £135 threshold by:
- Omitting shipping or payment costs
- Using the price before tax.
- Converting the order total to Pound sterling (GBP) according to live rates updated every 24 hours, if in another currency.
- If you're located the United States or Canada, you have different tax systems. These systems will not automatically charge VAT for UK orders. Contact us for assistance.
- If you're located inside the EU, setting up one tax rate will charge the same rate for all countries in the EU.
- If you're located outside the EU, like the UK or Switzerland, charge taxes for other countries by setting up tax overrides
- To prevent the automatic UK tax, create a regional tax override for the UK. This disables the automatic charge, regardless of order total.
- When shipping orders to the UK, review the UK shipping requirements.