Does the plugin handle UK VAT?
The UK has now left the EU, so we have had to carefully consider whether to continue supporting UK VAT in our Easy Digital Downloads EU VAT plugin. The outcome is that the plugin now partially supports UK VAT. We have continued to support it wherever this is realistically possible, and will help to point you in the right direction with any areas where this isn't possible.
This article explains what this means. You may also like our guide on what happens after Brexit.
Charging UK VAT - fully supported
The plugin has the UK VAT rate built into it, so your UK customers will automatically be charged the current tax rate on the EDD checkout. You do not need to manually add the UK tax rate to your EDD tax settings.
VAT invoices - fully supported
The plugin continues to add information about UK tax to your EDD invoices. We recommend adding your UK VAT number as well as your EU VAT number to your invoices.
Storing information about UK VAT collected - fully supported
The plugin continues to store the required information about the UK tax that you have collected, in exactly the same way that it does for your EU sales.
VAT reporting - fully supported
The UK is still included in the VAT report that is provided by the plugin. When you do your VAT returns, simply report the tax on your sales from EU countries on your MOSS VAT return, and the tax from your UK sales on your UK VAT return. Each country is listed on a separate line of the report, so this is straightforward to do.
Reverse charge mechanism for UK businesses - not supported
Before Brexit, businesses in the UK could validate their VAT number using the EU's central VIES database. This allowed our plugin to reverse charge the VAT for UK businesses. Unfortunately, there is now no straightforward way for UK businesses to validate their VAT number on the Easy Digital Downloads checkout.
There is a new UK VAT number validation service but unfortunately we cannot realistically integrate this into our plugin in its current form. The service is still quite limited and is in a very early beta phase, with some teething problems. It is extremely difficult to integrate with and there is a complex process for website owners to get approval, which must be done individually per website.
We will continue monitoring the situation and hope to add a reverse charge mechanism for the UK to our plugin if this becomes feasible in future.
Advice on reverse charging UK VAT
Given the current difficulties, we have provided the following advice on some alternative ways for you to handle this:
Build a custom integration
If you wish to continue allowing your UK customers to submit their VAT numbers on the EDD checkout and apply a reverse charge, then you can take the following steps:
- Sign up for a VAT Sense account. Each account comes with 100 free requests per month, and you can get more by signing up for a paid plan.
- Enable the VAT number field on the checkout by using the
- Add this code snippet created by Andreas Nurbo to your site in order to integrate the VAT Sense API for validation of UK VAT numbers. You will need to replace the VATSENSE_API_SECRET with the API key from your VAT Sense account.
This will run alongside our plugin so that UK customers can validate their VAT numbers using the VAT Sense API, and EU customers can validate their VAT numbers using the VIES API.
Please note that we are unable to provide support with the above steps. If you need help then we recommend asking your developer or posting a job on Codeable.
We recommend speaking with your accountant about the best way for your company to allow UK businesses to reverse charge their VAT. For example:
- You can Manually check UK VAT numbers using the new system after the payment has been made, and refund the VAT they paid.
- Alternatively, the UK company should be able to reclaim the VAT paid when they submit their own UK VAT return at the end of the quarter.