Originally posted by pr1
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Originally posted by MarkT
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- you buy it for £100+VAT = £120
- you sell it for £110+VAT (your 10% profit) = £132
You can't reclaim VAT on the purchase, so real cost to you is £120. However, you're paying over (say) 14.5% on your gross sales price, so of the £132 you pay over £19.14, leaving you with £112.86.
Therefore the end result of you reselling products with a 10% "profit" is you getting £112.86 from a cost of £120, so a loss after VAT is considered of £7.14.
There may be some really quirky way you can just about do that enough and find that the loss on it is slightly outweighed by the gain on then being able to use your "normal" FRS rate (rather than the 16.5% one)...but I think you're into really convoluted territory for most likely negligible gain.
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