LearnDash VAT Setup in the UK: Payments and WooCommerce Explained
Hello! This is Wellington Duarte, your favourite LearnDash developer in the UK, and today I’m going to explain everything about VAT setup inside your eCommerce and payment methods for your course platform.
In the last article, I explained VAT for people selling courses in the UK and EU.
In this article, I want to go a bit further and explain how I configure WooCommerce with LearnDash for my UK clients in a practical way.
Let’s get into it! ✈
LearnDash native payment method
When you buy and install the LearnDash plugin on your WordPress site, if you go to Settings > Payments, it will give you the option to connect your Stripe/PayPal account.
Until recently, it was possible to add the simple version of PayPal as a checkout option, but LearnDash is moving away from that integration:
LearnDash has not removed PayPal, but is transitioning away from older methods due to PayPal deprecating Instant Payment Notification (IPN) by the end of 2026. Users are being directed to use PayPal Checkout instead of PayPal Standard for payments. LearnDash.
To explain it simply, the old PayPal system used something called PayPal Standard (IPN), which confirmed payments through a server-to-server call.
You’ve probably seen this before. You go into a website, click “pay”, then you go to PayPal, complete the payment and PayPal would “notify” the site through IPN that the payment was successful, and you would get access to what you bought.
The problem is that for everything to work properly, your server needed to be perfect. If a student had any issue during checkout, they could complete the payment and not receive access to the course. This creates problems and increases support.
Today, the standard for payments is modern webhooks, which PayPal has also adopted, and you will see this in your LearnDash setup, just like Stripe uses.
A webhook is simply a better way to handle this situation. If a payment is made and your site does not unlock access, it will retry multiple times until it works, it creates logs so you can see what happened, and it is more secure and reliable.
Now you might be thinking, why use WooCommerce instead of LearnDash’s own payment system?
LearnDash + WooCommerce for UK-based course websites
LearnDash is not a payment platform, it is a course platform, so using its native integration limits you.
❌ Some of the problems are:
- No proper shopping basket with a simple checkout
- Difficulty managing discount codes, especially for launches with time limits
- No advanced bundles, for example grouping multiple courses together
- Other limitations like funnel control and payment options
✔ With WooCommerce, you can do pretty much everything related to optimising purchases inside WordPress, including:
- Automatically enrolling users after purchase
- Control of checkout and confirmation emails
- Discount codes
- Shopping basket
- Optimised checkout
- Abandoned cart recovery
- Cross-sell and upsell
- Product bundles
- Monthly plans
- Recurring access
- Cancellation and expiry control
- Connection with multiple payment gateways for different countries
- CRM integrations
- Marketing automation
- Funnels with plugins like CartFlows
- More complete reports and invoices required by companies
- A huge number of add-ons to improve your platform
- Integration with Klarna or Clearpay (Buy Now, Pay Later), which is great for higher priced courses and works easily with Stripe
You can still use Stripe and PayPal Checkout, especially because they are widely used in the UK, but with much more flexibility.
Stripe, for example, is a good option for automating VAT based on the student’s location, supporting UK VAT at 20%. It works well with WooCommerce, but full tax control, like VAT per country and B2B scenarios, depends on WooCommerce.
WooCommerce + VAT
With WooCommerce, you can have VAT included or excluded in your pricing, with rules per country, UK, EU and international, for B2C customers or B2B companies, already integrated with your preferred payment gateway.
How to install WooCommerce and configure VAT for the UK
In your WordPress dashboard, go to Plugins, Add Plugin, and in search plugins, look for WooCommerce. Install and activate it.
You will go through an automatic setup screen.
Follow the steps and set your store location to the United Kingdom. If it suggests installing extra features, untick everything for now and continue.
After WooCommerce is installed, go to Settings and on the same page, scroll down and enable “Enable tax rates and calculations” and save.
The Tax tab will appear at the top, go there.
- In Prices entered with tax, select “Yes, I will enter prices inclusive of tax”.
- In calculate tax based on, select Customer billing address.
This is important because for digital products like courses, VAT must be based on the customer’s location. - Shipping tax class, leave as “shipping tax class based on cart items”. There is no shipping for online courses.
- Rounding, recommended. This avoids odd decimals and is more aligned with UK accounting.
- Additional tax classes, only use if you have reduced or zero VAT. For courses, standard is enough, so leave it empty.
- Display prices in the shop, select including tax. In the UK, users expect to see the final price and this improves conversion.
- Display prices during cart and checkout, also including tax, to avoid price differences. Otherwise the student sees £50 and ends up paying £70.
- Price display suffix, you can add something like “incl. VAT” so it appears next to the price.
- Finally, in Display tax totals, select Itemised. This shows VAT separately in the checkout and improves clarity and trust.
How to configure VAT for the EU and international
On the same Tax page, go to Standard rates and import the CSV with EU VAT rates. You can download the CSV here.
If you do not configure each country, customers outside the UK will not be charged VAT, which is not recommended.
👉 VAT is not charged for customers outside the UK and EU, both B2C and B2B.
You can also use WooCommerce Tax. With it, you do not need to add the table manually, but it does not fully handle B2B VAT or more complex EU rules.
For EU sales, it is recommended to store at least two pieces of location evidence, such as billing address and IP, to stay compliant.
Plugins like Quaderno are more reliable. Avoid TaxJar, it can be problematic. 😆
Compliance and WooCommerce
For your LearnDash course to have a proper payment setup in the UK, you need to pay attention to a few compliance points.
- Install WooCommerce PDF Invoices & Packing Slips and include your VAT number and business address
- Add an unchecked opt-in box for marketing
- Add clear privacy policy links in the checkout
- Dashboard optimisation. In LearnDash, create a clean “My account” area where UK students can access certificates and invoices easily.
Important note
Live courses, like workshops on Zoom, may follow different VAT rules depending on whether the customer is B2B or B2C, so it is important to check the correct classification.
I hope this article is helpful for you. If you need a LearnDash Developer to set up the VAT Tax on your WooCommerce, please contact me.
