UK and Northern Ireland VAT Rates in Woocommerce – In this article, I am showing you a step-by-step guide on how to set up UK and Northern Ireland VAT rates in Woocommerce.
By reading this post, you will learn what Value Added Tax (VAT) is, why you should register, what changed with Brexit for UK and Northern Ireland and ultimately how to set up UK and Northern Ireland VAT rates in Woocommerce.
VAT, which stands for Value Added Tax, is a tax on the selling of goods and services within the EU.
The rate or percentage of the VAT varies depending on:
Brexit, which stands for ‘British Exit’, refers to the withdrawal of the United Kingdom (UK) from the European Union (EU). Followed a referendum, the UK is not an EU member starting from January 1st, 2021.
One of the most important changes coming from Brexit affected the selling of goods to the UK and Northern Ireland.
In brief, if you have an ecommerce website selling goods to the UK, you need to be aware of the following (source: Woocommerce.com[1]Ready for Brexit: a Guide for Woocommerce Store Owners, Woocommerce.com):
Northern Ireland is a territory within the UK. As such, the Woocommerce VAT rate you set up for the UK will apply.
However, if you are selling goods from the EU to Northern Ireland you will need to charge the EU VAT rate rather than the UK one.
Let’s see how we can solve this.
In these two short guides you will learn how to apply the EU VAT rate to Northern Ireland, apply the correct VAT rate for UK orders below £135 and no VAT for UK orders above £135.
To set up the EU VAT rate you will have to – literally – add Northern Ireland counties to Ireland. Here’s how to do it:
/* UK and Northern Ireland VAT Rates in Woocommerce: Adds Northern Ireland Counties to Ireland Shipping for VAT*/
add_filter( 'woocommerce_states', 'custom_woocommerce_states' );
function custom_woocommerce_states( $states ) {
$states['IE'] = array(
'IE1' => 'Antrim',
'IE2' => 'Armagh',
'IE3' => 'Carlow',
'IE4' => 'Cavan',
'IE5' => 'Clare',
'IE6' => 'Cork',
'IE7' => 'Donegal',
'IE8' => 'Down',
'IE9' => 'Dublin',
'IE10' => 'Fermanagh',
'IE11' => 'Galway',
'IE12' => 'Kerry',
'IE13' => 'Kildare',
'IE14' => 'Kilkenny',
'IE15' => 'Laois',
'IE16' => 'Leitrim',
'IE17' => 'Limerick',
'IE18' => 'Derry/Londonderry',
'IE19' => 'Longford',
'IE20' => 'Louth',
'IE21' => 'Mayo',
'IE22' => 'Meath',
'IE23' => 'Monaghan',
'IE24' => 'Offaly',
'IE25' => 'Roscommon',
'IE26' => 'Sligo',
'IE27' => 'Tipperary',
'IE28' => 'Tyrone',
'IE29' => 'Waterford',
'IE30' => 'Westmeath',
'IE31' => 'Wexford',
'IE32' => 'Wicklow',
);
return $states;
}
To set up the UK VAT rate you will have to put a conditional logic on whether the order is below or above £135. Here’s how to do it:
function apply_uk_zero_tax_rate( $cart ) {
// UK and Northern Ireland VAT Rates in Woocommerce: UK VAT limit is 135 GBP; as of 2/11/2021, that's $186.25
$VAT_limit_UK = 186.25;
// UK and Northern Ireland VAT Rates in Woocommerce: get customer shipping location
$customer_country = WC()->customer->get_shipping_country();
// UK and Northern Ireland VAT Rates in Woocommerce: Loop through cart items to get cart subtotal
foreach ( $cart->get_cart() as $cart_item ) {
$subtotal += $cart_item['line_total'];
}
// UK and Northern Ireland VAT Rates in Woocommerce: Now check: If country <> GB (Great Britain), OR
// country = GB & cart subtotal less than 135£, THEN
// do nothing & keep standard tax rates
if ( ($customer_country != 'GB') || ( ($customer_country == 'GB') && ($subtotal < $VAT_limit_UK) ) )
return;
// Otherwise, loop through cart & set each item's tax rate to zero rate // (Note use of slug 'zero-rate', instead of name 'Zero rate') foreach ( $cart->get_cart() as $cart_item ) {
$cart_item['data']->set_tax_class( 'zero-rate' );
}
}
add_filter( 'woocommerce_before_calculate_totals', 'apply_uk_zero_tax_rate', 10, 1 );
add_filter( 'woocommerce_adjust_non_base_location_prices', '__return_false' );
Please note that in order to apply any VAT rate, you will have to first set a VAT rate per country in Woocommerce > Settings > Tax > Standard Rates.
Similarly, in order to apply no VAT to UK orders above £135 you will have to set a zero rate tax in Woocommerce > Settings > Tax > Zero Rate Rates.
To learn more about how to set up Taxes in Woocommerce, please check this post[4]Setting Up Taxes in Woocommerce, Woocommerce.com.
I hope you liked this article about how to set up UK and Northern Ireland VAT in Woocommerce.
If you have any comment or you need help with your shop, please feel free to get in touch.
Below you can find two easy to use explanatory tables about respectively UK taxes and Brexit and VAT Calculation in Northern Ireland (source: Shopify.com[5]UK Taxes and Brexit, Shopify.com):
Merchant Location | Changes & Requirements |
---|---|
United Kingdom | The sale of goods from UK merchants to EU customers have become exports (the sending of goods from a country or customs union to outside that country or customs union) rather than dispatches (the sending of goods from one EU member state to another EU member state). UK merchants might be required to register for VAT, and to account for import VAT in the EU. VAT registrations might be required across multiple EU member countries depending on a number of factors. |
European Union | The sale of goods from EU merchants to UK customers have become imports (the receipt of goods into a country or customs union from outside country or customs union) rather than acquisitions (the receipt of goods from one EU member state to another EU member state). The UK VAT laws that came into force on January 1, 2021 result in new VAT requirements for sales equal to or less than 135 GBP. Under the new laws, the sale of goods equal to or less than 135 GBP require you to register for VAT in the UK. In this case, VAT is collected at the point of sale and remitted by the merchant. For the sale of goods over 135 GBP, you might not be required to collect VAT at the point of sale. In this case, VAT and duties are remitted by the importer. |
Outside of UK or EU | The new UK VAT laws that came into force on January 1, 2021 apply to the sale of goods from non-EU merchants to UK customers. Non-EU merchants who sell to UK customers might be required to register for VAT in the UK. The UK VAT laws that came into force on January 1, 2021 result in new VAT requirements for sales equal to or less than 135 GBP. If the sale of goods is equal to or less than 135 GBP, then you must register for VAT in the UK. If the sale of goods is over 135 GBP, then you might not be required to collect VAT at the point of sale. |
Order Origin | Order Destination | VAT Applied at Checkout |
---|---|---|
United Kingdom | United Kingdom | If you have a UK VAT registration, then UK VAT is charged. |
Northern Ireland | If you have a UK VAT registration, then UK VAT is charged. |
|
European Union | VAT is not charged. |
|
Northern Ireland | United Kingdom | If you have a UK VAT registration, then UK VAT is charged. |
Northern Ireland | If you have a UK VAT registration, then UK VAT is charged. | |
European Union | If you have a UK VAT registration, then UK VAT is charged. | |
European Union | United Kingdom | VAT charges depend upon on the cost of the order and whether you have a UK VAT registration. If you don't have a UK VAT registration, then VAT is not charged. If you have a UK VAT registration and the order is over 135 GBP, then VAT is not charged. If you have a UK VAT registration and the order is equal to or less than 135 GBP, then UK VAT is charged. |
Northern Ireland | VAT charges depend upon on the cost of the order and your VAT registrations. If you have an EU VAT registration, then EU VAT is charged. If you have registrations for both the EU and the UK, then the UK registration takes precedence and UK VAT is charged. |
|
European Union | If you have an EU VAT registration, then EU VAT is charged. |
References
Pasquale is Founder at Increasily.com, a H2H marketing agency based in Dublin, Ireland, and owner at print-on-demand ecommerce Mintycase.com. Pasquale has worked in Digital Marketing and Account Management since 2004. He currently lives in Dublin with his wife, stepdaughter and cat.
Pasquale Mellone