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VAT on shipping

  • 01-08-2008 9:50pm
    #1
    CapedCrusader
    Registered Users Posts: 215 ✭✭


    Hi folks,
    Not sure if this is the right place, but hopefully someone can help.

    How does one account for VAT on shipping charges for an online retail business where, depending on weight, some orders are shipped via an post and some are shipped via courier? No VAT is paid on an post charges but 21% is paid for courier services.

    What makes this complicated, is that shipping charges are subsidised (on average) and the customer pays a flat rate. How much VAT should be paid by the customer in each case and can one claim the difference back?

    For example:

    Case 1:
    An Post postage cost (retailer pays) 6.50
    VAT paid by retailer: 0
    Shipping charge to customer: 5.99
    VAT paid by customer: 0

    Case 2:
    Courier company cost to retailer: 12.00
    VAT paid by retailer: 2.52
    Shipping charge to customer: 5.99
    VAT paid by customer: 1.26

    Do I have to charge VAT on shipping charges when they are sent via An Post?

    In case 2, is the retailer entitled to claim the difference in the VAT paid and the VAT charged?

    Thanks,

    CC


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