Tax and Shipment Options

Note: The examples given in this section are intended for clarification only, and should not be used as a template for any real taxation or shipping situation. If you are uncertain about taxation rules, duties or any other legal implications of trading on-line, professional guidance should be sought from an Accountant, Solicitor or other qualified advisor. For additional guidance on your tax and legal obligations WorldPay plc in association with Deloitte & Touche and Berwin Leighton have created www.t@xandlegal.com. This intelligent system will guide you through a series of simple questions to provide you with tailored information relevant to your circumstances. To enter the web site simply click on their logo at the top of the screen.

Tax and shipping has to be flexible and that makes it appear complicated at first sight. But imagine you were going on holiday and had to give your new dispatcher simple instructions so that he could raise invoices and handle dispatch while you were away.

You would need to tell the dispatcher.

Which groups of goods to charge tax on (tax goods groups).
What tax to charge on goods to various destinations (tax rate groups).
What to charge for the various carriage types (shipping rates groups).
Whether to calculate the shipping charges based on unit or weight etc. (shipping goods groups).

This could get pretty complicated, so to make it simpler you would gather things with identical characteristics into groups and give the values to the whole group.

For example lets say that you dispatch to every country in Europe (except France) and that they all share the same carriage charge and tax rate. Why give your dispatcher a table that lists your shipment charges and tax rates to each European country, it’s always the same. Simply call the whole group of countries ‘Europe’ and tell him which carriage charge and tax rate to use for Europe.

This is the principle used by TecknaShop’s Tax and Shipping system, specify a common group name, assign values to the group and then add items to the group as needed. Need to ship to France now?, just add France to the Europe group and in one operation your dispatcher knows what carriage and tax rate to use.

How it works for the shopper
When the shopper is ready to buy they are offered a Despatch Choice, which you defined earlier. Lets say that they choose UK First Class Post. This choice clearly implies that they want delivery in the UK so this choice will bring the following to the order:

UK Tax rates.
The shipping cost by First Class Post.
And the user will be limited to a delivery address in the UK (The country dropdown list for delivery address will only have UK in it).

So to make this work we have to predefine the tax rates, the shipping costs and the limits for delivery address.
Run through the example below to get a feel for how the system works. Most of it won’t make much sense at first but as far as understanding it goes, it will all come together when you set up Dispatch Choices at the end.

Shopper Locations

The shopper location allows you to define the limits for delivery addresses when the customer is choosing their dispatch method. This is how you stop someone choosing a UK delivery charge then giving a delivery address in Australia.

EXAMPLE
In our example we have 3 markets – the UK, US and Canada. The tax we charge and the delivery costs to the US and Canada are the same so we can consider these to be one market or ‘Shopper Location’. So we need to set up 2 Shopper Locations – ‘UK’ and ‘US & Canada’

Click on the Tax and Shipping tab.
Click the Go button for Shopper Locations.
Click the Add button.
In the Description Field type ‘UK’.
Click the Selected Countries Only radio button.
Scroll down the countries list until you find the ‘UK’ then click on it once to select it.
Click the Add and Return to Add button.
In the Description Field type ‘US & Canada’.
Scroll down the countries list until you find ‘Canada’ then click on it once to select it.
Hold down the ‘Ctrl’ key on your keyboard to maintain the selection then scroll down and select the ‘US’.
Click the Add and Return to Menu button.

When you come to set up your own system the other two radio buttons can help with selection. The Local Selection button assumes the country of the store that was set in the Personal Details page.

Adding a Location
To add a new delivery location, click the Add button in the menu. You will now need to add a location description (i.e. as above) and the countries that are included in this location. You can state that the location is local therefore, all the listed countries are ignored or you can state which countries to include/exclude. To include a country to your delivery location variable simply select it from the list, (you can highlight multiple countries by holding down the 'CTRL' key when selecting) and confirm the Selected Countries Only radio button is selected before storing the location variable.

View / Edit a Location
Select the shopper location from the drop down list and click the View/Edit button to change the description and the selection of the countries. To confirm any changes click the Update button.

Deleting a Location
When deleting, a confirm checkbox is displayed in order to avoid accidental deletions. This box needs to be checked before the delete button becomes effective.

Tax Configuration

There are two sections for setting up the tax parameters they are:

Tax Goods Groups

Tax goods groups are groups of products that have the same tax applied to them.

Example
In our example we will sell books and CD’s. We sell over 1000 CD titles, which are all individual products, but they will all have the same tax rate applied to them, so we will have a Tax Group for CD’s. The same applies to our 800 book titles so we will have another Tax Group called books.

Click on the Tax and Shipment tab.
Click the Go button for Tax Configuration.
Click the Add button.
In the Description Field type ‘CDs’.
Click the Add and Return to Add button.
In the Description Field type ‘Books’.
Click the Add and Return to Menu button.

View / Edit Tax Goods Groups
Select the Tax Goods Group from the drop down list and click the View/Edit button to change any of the entries. To confirm any changes click the Update button.

Deleting a Tax Goods Group
When deleting, a confirm checkbox is displayed in order to avoid accidental deletions. This box needs to be checked before the Delete button becomes effective.

The tax goods groups will be selected when setting up products in Catalogue Options.

It should be clear that the international rules regarding the taxation on goods sold by you to shoppers anywhere in the world, regardless of where you are located, are irrelevant as far as TecknaShop is concerned, as the functionality of this software enables you to specify your own tax rules.

Tax Rate Groups

Tax Rates Groups are the rates of tax applicable on each product to each location.

Example
In our example we will need to specify the tax for our two Goods Groups (CD’s and Books) to our two Shopper Locations (UK and US & Canada).

Click on the Tax and Shipment tab.
Click the Go button for Tax Configuration.
In the Tax Rates Group Menu Click the Add button.
In the Description Field type ‘UK Tax’.
In the UK, books are rated at 0% and CD’s at 17.5% so enter these two figures in the boxes provided.
Click the Add and Return to Add button.
In the Description Field type ‘Export Tax’.
If we are exporting, both books and CD’s will be at 0% so enter this in both boxes.
Click the Add and Return to Menu button.

View / Edit Tax Rates Groups
Select the Tax Rates Group from the drop down list and click the View/Edit button to change any of the entries. To confirm any changes click the Update button.

Deleting a Tax Rates Group
When deleting, a confirm checkbox is displayed in order to avoid accidental deletions. This box needs to be checked before the Delete button becomes effective.

Shipping Configuration

The first time you enter this section you will be presented with the shipping model options. These screens will allow the option of including additional fields for greater details when setting up both the shipping goods group and the shipping rates group. To re-enter the Shipping model options after the initial set up, enter the Shipping Configuration menu and at the bottom of the menu you will have the option to change the shipping model contents again.

Shipping Model Options

TecknaShop Standard Model
You have three additional options for setting up your shipping parameters they are:

Use Cost Limit - this enables you to set a maximum and minimum cost for your shipping, regardless of the amount of goods dispatched.
Apply Tax on Shipping - this option enables you to add a tax component to your shipping charges.
Allow CSV Upload of Rates - you can apply variable rates to the different shipping rate groups simply by uploading a CSV file with the information pre-set. See Appendix F for more details on the format of the CSV format.

To include any of these options check their adjacent boxes and these additional entries fields will then be added for configuring the shipping parameters.

Click the Store Options button to update the options.

Shipping Goods Group

Shipping Groups are groups of goods that have the same shipping charges scheme i.e. you charge the same per unit or the same per unit of weight.

Example
In our example we will have a fixed shipping charge for CD’s, but for books, which vary widely we will charge by weight so we need two Shipping Goods Groups which we will call CD’s and Books.

Click on the Tax and Shipment tab.
Click the Go button for Shipping Configuration.
In the Shipping Goods Group Menu Click the Add button.
In the Description Field type ‘CDs’.
Click the Add and Return to Add button.
In the Description Field type ‘Books’.
Click the Add and Return to Menu button.

View / Edit Shipping Goods Groups
Select the Shipping Goods Group from the drop down list and click the View/Edit button to change any of the entries. To confirm any changes click the Update button.

Deleting a Shipping Goods Group
When deleting, a confirm checkbox is displayed in order to avoid accidental deletions. This box needs to be checked before the Delete button becomes effective.

Shipping Goods Group Options
In this section you choose whether to apply shipping costs at product item level, shipping group level or on the whole order. When selecting the Whole Order level you must also choose a previously entered shipping goods group (see above) as no costs will have been previously assigned. Operational Tip: If your store is selling a wide range of different product then you must only apply shipping at a product item level. However, if you store is selling only one type of product like CD's then you can apply shipping to the whole order level.

The Shipping Goods Group will be selected when setting up products in Catalogue Options.

Shipping Rates Group

Shipping Rates Groups are individual tables of our shipping charges by each shipping method to each location for each Goods Group. Note: These are the charges that you will charge the shopper and not costs from the carriers. You will need to get price lists from your chosen carriers but you do not necessarily need to duplicate them here, you may set up a much simpler pricing structure if you wish.

Example
In our example we will use two carriers. First Class Post in the UK and United Parcels Service (UPS) for the US and Canada. (None of the prices used reflect real rates)

Click on the Tax and Shipment tab.
Click the Go button for Shipping Configuration.
In the Shipping Rates Group Menu Click the Add button.
In the Description Field type ‘UK First Class Post’.
Our Goods Groups are already displayed and we will charge for books by weight, so for Books select a rate type of Weight from the drop down list.
In the Books Rate box type ‘2.50’ – this is the rate in our default currency (set by the installation Manager when you store was created) per unit of weight we you will charge. Note: You can choose your own unit of weight, which can be whatever is appropriate, but you must use the same unit when you specify the weight of products later.
In the Min box type ‘2.45’ this will be our minimum shipment charge for Books.
In the Max box type ‘45’ this will be our maximum shipment charge for Books.
In Tax Rate type ’17.5’ we will add 17.5% tax to our shipping charge.
For this example we won’t use rates from a CSV file so leave this blank (Further information on CSV Rate files can be found in Appendix F).
In the CD section choose a Rate Type of Fixed and enter 1.50 in the Rate box.
Duplicate all of the other figures from Books for the CD section. Now we are set up to charge for 1.50 each to ship CD’s with a minimum charge of 3.00 and a max of 45.00.
Click the Add and Return to Add button.
In the Description Field type ‘US & Canada by UPS’.
Duplicate the set up from First Class post using your own rates, (don’t forget you won't be able to charge tax on shipping to the US and Canada).
Click the Add and Return to Menu button.

Shipping Rate Types:

By Fixed Price - An uncommonly used method, as the figure derived is not variable according to the number of products ordered. The shipping cost is derived from the figure entered in the rate box.
By Unit - A commonly used method, where the shipping cost per unit (as entered in the rate box) is multiplied by the amount of items bought.
By Value Percentage - the shipping cost is derived from the percentage entered in the rate box, multiplied by the product cost.
By Weight - the price per weight unit is entered in the rate box. Used in combination with the weight of the product (as entered in Catalogue Options), a shipping cost is derived by multiplying one figure with the other. The actual weight unit (g, Kg) used in both areas is irrelevant, as all that is required is the result of the multiplication (the weight figures are not actually displayed to shoppers).

View / Edit Shipping Rates Groups
Select the Shipping Rates Group from the drop down list and click the View/Edit button to change any of the entries. To confirm any changes click the Update button.

Deleting a Shipping Rates Group
When deleting, a confirm checkbox is displayed in order to avoid accidental deletions. This box needs to be checked before the Delete button becomes effective.

Shopper Dispatch Choices

This area is used to draw together the tax and shipping rates and the delivery location enabling a single choice to be made by your shoppers prior to shopping (this is made upon entry to the stores catalogue at the same time as the choice of currency, so it will not inconvenience them).

Example
In our example we will set up two Dispatch Choices, one for UK shoppers and one for US and Canadian shoppers.

Click on the Tax and Shipment tab.
Click the Go button for Shopper Dispatch Choices.
In the Add Shopper Dispatch Choice Menu Click the Add button.
In the Description Field type ‘UK Shopper'.
In the Tax Rate Group drop down list select ‘UK Tax’.
In the Shipping Rate Group drop down list select ‘UK First Class Post’.
In the Shopper Location drop down list select ‘UK’.
Click the Add and Return to Add button.
In the Add Shopper Dispatch Choice Menu Click the Add button.
In the Description Field type ‘US or Canada Shopper’.
In the Tax Rate Group drop down list select ‘Export’.
In the Shipping Rate Group drop down list select ‘US and Canada by UPS’.
In the Shopper Location drop down list select ‘US and Canada’.
Click the Add and Return to Menu button.

Now we can offer the shopper a single choice that will select the tax and shipping rates that will be applied to the order and limit where the order can be dispatched.

If the shopper selects ‘US or Canada Shopper’ their order will have tax charged at the Export rate, they will be charged for delivery by UPS, and when they enter their delivery address the country drop down list will only have options for the US and Canada.

View / Edit Shopper Dispatch Choice
Select the Shipping Rates Group from the drop down list and click the View/Edit button to change any of the entries. To confirm any changes click the Update button.

Deleting a Shopper Dispatch Choice
When deleting, a confirm checkbox is displayed in order to avoid accidental deletions. This box needs to be checked before the Delete button becomes effective.

Reporting

To enter any of the tax and shipping reports simply click the Go button adjacent to the reports title.

Tax Rules Report
The tax rules report displays an ID number of each of the Tax Goods Groups and enables you to edit each of the group's details by checking the radio button next to the groups name and clicking the edit button at the bottom of the report.

Shipping Rules Report
The shipping rules report displays an ID number of each of the Shipping Goods Group and also enables you to edit each of the groups details by checking the radio button next to the groups name and clicking the edit button at the bottom of the report.

To view the table of content when viewing this help file in an early browser version click here