How to set up Tax Settings for UK domiciled merchants?

This article guides merchants through the January 1, 2021 UK VAT changes and how to set up UK Tax Settings for UK domiciled merchants.

UK VAT Changes (effective January 1, 2021)

The standard UK VAT rate is 20%. Wish will automatically add VAT for applicable UK-bound orders on top of the customer-paid product price and shipping price. Therefore, please ensure that the product price and shipping price you provide do not already include the VAT amount.

The below list contains a detailed overview of the changes to UK VAT starting January 1, 2021:

• Low Value Consignment Relief, the current VAT exemption for imports of goods in small consignment of a value of up to £15 into the UK, was abolished.
• For orders shipping to the UK from outside of the UK, if the customer-paid price of the consignment is less than or equal to £135 (excluding all other customer payments such as shipping, insurance, and taxes), Wish will calculate, collect, and remit VAT directly to the UK tax authorities.
• For orders shipping to the UK from outside of the UK, if the customer-paid price of the consignment is greater than or equal to £135.01 (excluding all other customer payments such as shipping, insurance, and taxes), the VAT amount will be included in the purchase price. Wish will remit this amount to merchants and will require merchants to forward the VAT amount to the freight forwarder designated by Wish or the merchants. The freight forwarder then pays the VAT amount due at the border on behalf of the customers.
• For orders shipping within the UK (shipping from the UK, to the UK), Wish will add and collect VAT on all orders. For UK domiciled merchants shipping within the UK who have set up Tax Settings and have a UK VAT obligation*, the collected VAT amounts will be remitted to the merchants to remit to the UK tax authorities. For non-UK domiciled merchants shipping orders within the UK, Wish will calculate, collect, and remit VAT directly to the UK tax authorities.

*UK domiciled merchants setting up Tax Settings for the UK will need to indicate if they do or do not have a VAT obligation in the UK. If UK domiciled merchants do have a VAT obligation in the UK, they will need to provide their VAT number (regardless of store account type) - see below for how to do so. If UK domiciled merchants do not have a VAT obligation in the UK, they will need to provide other information - see below for more details.

UK domiciled merchants shipping within the UK are strongly encouraged to set up UK Tax Settings to comply with the UK VAT changes and ensure accurate VAT collection and remittance. UK Tax Settings are now available to set up via our Tax Settings page in the Merchant Dashboard. Failure to properly set up UK Tax Settings will result in Wish adding VAT to the merchant’s UK-bound orders and remitting directly to the UK tax authorities on behalf of the merchant for all UK-bound orders. Please note that once VAT is remitted by Wish to the UK tax authorities, there is no option for a refund from Wish. Merchants will remain responsible for any VAT due in the UK.

How to set up UK Tax Settings for UK domiciled merchants?

1. On the Merchant Dashboard, navigate to Settings > Taxes. You will be brought to your Tax Settings home page. If you have not previously validated your store, you must click “Validate my store” before you can set up Tax Settings (to learn more about how to validate your store, please visit this FAQ). 

Note that on this page:

• By default, you will see the UK display under the “Country” column listed as “United Kingdom (Great Britain) - MPF”, with the “Tax liability” column displaying “Determined at fulfillment”. Wish is a Marketplace Facilitator (MPF) in the UK starting January 1, 2021. This means that unless you set up Tax Settings as a UK domiciled merchant, Wish will calculate, collect, and remit VAT directly to the UK tax authorities on your behalf for applicable UK-bound orders (including UK domestic orders - orders shipping from to the UK), starting January 1, 2021.
• Once you have successfully set up your Tax Settings for the UK, for domestic UK orders (shipping from and to the UK), Wish will calculate and collect VAT on your behalf, but will remit the amount to you, so that you can remit it to the UK tax authorities. 

Click “Set up taxes'' to start the process of setting up your new UK Tax Settings.

3. On the “Set up taxes” page, you will have the option to select countries for tax collection. Select the United Kingdom (Great Britain), and click “Continue” (see screenshot below).

4. You can now enter your UK tax identification details. Here you must indicate if you do or do not have a VAT obligation in the UK. If you have a VAT obligation in the UK, you will need to provide your VAT number here (regardless of store account type).

If you do not have a VAT obligation in the UK, you must either:

• Provide your Company Registration Number (CRN) if your store account type is “Company”; or
• Provide your Tax Identification Number (TIN) or your National Identification Number (NIN), if your store account type is “Individual”.

After providing applicable information, click “Continue” to proceed.

5. View a summary of the tax information you have entered. Click the checkbox at the bottom to agree that you are responsible for the accuracy of any information you have provided and for the collection, reporting, and payment of all taxes to the appropriate authorities, and to agree to the terms set forth in the Wish Merchant Tax Policy (see screenshot below). 

6. In the following popup modal, click “Confirm” to submit your tax settings.

7. You will be returned to the Tax Settings homepage, and you will see “Pending” display under the “Status” column in the “United Kingdom (Great Britain) - MPF” row (see screenshot below), indicating you have successfully submitted your tax information, which is pending review.

You can click on the pencil icon under the “Action” column in the “United Kingdom (Great Britain)” row (bringing you back to the “Tax for United Kingdom” page) to make any changes to your tax information or default ship-from location, if necessary. 

8. Once your tax information has been successfully verified, your “Status” will display as “Active”, indicating your UK Tax Settings are now active.

Note that after merchants set up the UK Tax Settings in Merchant Dashboard per steps above, the setup will be subject to review by Wish for validity before it becomes active. The review process may take up to two business days.

9. If you click the tripled-dotted icon to the right of the pencil icon in the “United Kingdom (Great Britain) - MPF” row, you can select “Cancel tax setup” or “View tax setup details”.

Selecting “Cancel tax setup” will result in Wish calculating, collecting, and remitting VAT directly to the UK tax authorities on your behalf for all domestic UK orders (orders shipping from and to the UK).

If you select “View tax setup details”, the row will expand to display your tax information for the United Kingdom. You can also view your tax information by clicking the arrow to the left of the “United Kingdom (Great Britain) - MPF” row (see screenshot above).