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Bit of a delayed reply on this one, dont get on the forums as much as I’d like these days. On the extension side I’d suggest taking a look at Matrixrates in first instance - this will allow you to show multiple rates to the customer (e.g. 1st class, 2nd class, Courier) and vary the rates based on destination, price, etc.
In terms of VAT standard Magento will allow you to set up rules for which countries to apply VAT and which not too. The trick comes with EU VAT where you need to apply in some instances and not other. We have written a blog about this.
I am in the process of research what would be the best shipping solution.
We are UK based with customers around the world.
Comparing primariliy DHL, UPS and Royal Mail.
Which is the most compatible with Magento?
Any extensions that work particularly well in terms of managing VAT with the ability to remove Vat for those Products shipping Abroad?
Please share your thoughts and experiences, any help on this would be very helpful.