Does the shipping have to have VAT?

FAQ: Does the shipping have to have VAT?

The rule for shipping is as follows (and this applies for UK merchants only):

If you are charging exact Royal Mail fees for shipping, e.g. your shipping cost is exactly the same as a Royal Mail first class stamp or other Royal Mail delivery charge, then no VAT should be applied for the shipping.

If your shipping fee is anything other than Royal Mail fees e.g. by courier, or includes some kind of packaging description i.e. Post and Packaging (labour cost), then VAT should be applied to the shipping fee. 
 

 

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