Online Pricing - EU/NON EU customers

[JPMiddleton]

So I’ve noticed recently when buying stuff on UK websites to post to a friend in the US, that there isn’t a consistent way that pricing is handling with regards to VAT (or lack thereof).

There are stores that:

1) change the pricing immediately when you visit from a US IP and remove VAT.
2) remote VAT at checkout.
3) charge exactly the same price to Us customers but just remove the acknowledgment of VAT, thus increasing their margin.

Does anyone have any advise on how they handle it and what works well?

 

[apricot]

US customers don't care whether they are paying vat or not as long as they are not b2b customers. Go with number 3.

 

[Paul Kelly ICHYB]

Get a decent ecommerce system that can handle what is actually a basic transaction function.

 

[Paul Norman]

Get a decent ecommerce system that can handle what is actually a basic transaction function.

It really is this simple, of course.

Your store should be set up to handle orders from different jurisdictions. For VAT treatment, the jurisdiction is where the transaction is fulfilled.

There are a number of ways systems handle this, and the better ones do all of the ways.

An IP address, of course, is not absolutely linked to where you want an item sent.

 

[JPMiddleton]

Of course, a system can handle any of the above. And our own website handles this well.

I am just curious, with brexit looming, what “policy” stores take- keep the extra margin or remove the tax and “discount” the order.

 

[Paul Norman]

From a policy perspective we will be pricing net of VAT for non UK destinations - with the slight caveat that we don't know yet exactly what the deal with be.

I am assuming no deal at the moment.

 

[Mr D]

Perhaps some sort of system that gives US prices excluding VAT and EU prices including VAT?

Failing that just charge everyone the same price and not charge the VAT where it isn't chargeable.

 

[JPMiddleton]

Failing that just charge everyone the same price and not charge the VAT where it isn't chargeable.

Do you mean something like this?

UK price: £10 (inc VAT)
ROW (assuming no EU deal) price: £10 with no VAT charged.

That may be fine for the US, but I think EU customers will expect VAT to be removed as they’re going to have to pay customs and import if there is no deal, and even potentially if there is.

 

[DontAsk]

Some suppliers use the "VAT" element towards the extra postage to foreign parts.

 

[JPMiddleton]

That’s not something I’ve encountered- you mean basically using it to upgrade to a faster courier?

 

[Mr D]

Do you mean something like this?

UK price: £10 (inc VAT)
ROW (assuming no EU deal) price: £10 with no VAT charged.

That may be fine for the US, but I think EU customers will expect VAT to be removed as they’re going to have to pay customs and import if there is no deal, and even potentially if there is.

Perhaps you could charge them all in and send DDP.

 

[Mr D]

Some suppliers use the "VAT" element towards the extra postage to foreign parts.

Some of us simply charge extra for the extra postage to cover it in full.

 

[JPMiddleton]

Perhaps you could charge them all in and send DDP.

i like this idea and have already enquired with our courier, DHL. Unfortunately a good portion of orders are small and light so go via Royal Mail and that won’t be an option for those orders.

 

[Mr D]

i like this idea and have already enquired with our courier, DHL. Unfortunately a good portion of orders are small and light so go via Royal Mail and that won’t be an option for those orders.

Then website setting to not charge them VAT would seem to apply.

As I recall its a minor bit of coding in the payment settings.

 

[DontAsk]

That’s not something I’ve encountered- you mean basically using it to upgrade to a faster courier?

No, I mean exactly what I said.

 

[OnePatch]

US customers really didn't care about, whether they are paying vat or not as long as they are not b2b customers. As my opinion best one one is option 3, i.e charge exactly the same price to Us customers but just remove the acknowledgment of VAT, thus increasing their margin