Double taxation charged on shipping percentage

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12 years 4 weeks ago #45112

Hi,
I been using a shipping method which applies a 2.5% charge to the value of the goods ordered. Both the goods and the percentage shipping charge are taxable. In this case at the UK VAT rate of 20%

My test product costs £1000 and the % charge should therefore be £25. Both are then subject to VAT.

However, on the checkout page, Hikashop calculates a shipping charge of £30 which is then subject to futher VAT, taking the total to £36 for the shipping.

If I use a flat rate shipping charge instead of a percentage, the VAT is correctly applied only once.

If I use a flat rate charge and a percentage charge, the flat rate is correctly taxed only once but the % charge is still incorrectly taxed twice.

Screenshots attached.

Please advise.

Thanks
PhilP.

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12 years 4 weeks ago #45297

The value of the percentage shipping price is calculated based on the total price of products including VAT.
That's why you think that the tax is applied twice.
It's not 2.5% of £1000 but 2.5% of £1200 that is calculated by the system for the shipping price without VAT.
So it's simple, just adapt the percentage. Instead of 2.5%, set 2.803% and you will get the proper calculations.

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12 years 3 weeks ago #46016

Hi Nicolas,
Thanks for your explanation - this function was quite confusing at first but now I understand it.
Regards
PhilP.

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