Any accountants/book keepers/online sellers on? (dull VAT question)...

[pardoe]

This is a really boring one, but it's something work/course related that i'm struggling to get my head around and given the broad church that is Bluemoon thought this might be a good place to ask.

I need to work out a break-even calculation for a VAT-registered company selling an item online, but my maths is shite and i'm getting nowhere fast. Can anyone help?

Net cost of item: £5
Net costs to ship: £2
Online fees: 12%
VAT on sale: 20%

Is it as simple as saying...£5 + £2 × 12% × 20% = BREAK EVEN?

Or is it better to go backwards...RETAIL PRICE -20% -12% -£2 -£5 = PROFIT/LOSS?

Thanks in advance.

 

[jimharri]

You need to get yourself out and get laid. Now, if you'll excuse me, I'm off back to Babesta QVC.

 

[geoff clipp]

If you're VAT registered the VAT amount shouldn't even factor into your breakeven.

Also, 20% of your retail price won't give you the VAT amount as you're calculating back from 120% so mebs use the first calculation.

 

[NPBlue]

What's the retail price?

 

[aguero93:20]

This is a really boring one, but it's something work/course related that i'm struggling to get my head around and given the broad church that is Bluemoon thought this might be a good place to ask.

I need to work out a break-even calculation for a VAT-registered company selling an item online, but my maths is shite and i'm getting nowhere fast. Can anyone help?

Net cost of item: £5
Net costs to ship: £2
Online fees: 12%
VAT on sale: 20%

Is it as simple as saying...£5 + £2 × 12% × 20% = BREAK EVEN?

Or is it better to go backwards...RETAIL PRICE -20% -12% -£2 -£5 = PROFIT/LOSS?

Thanks in advance.

Vat doesn't get included if they're selling it outside the UK which you haven't factored, but you've left out overheads so you're miles off break even.

 

[pardoe]

Vat doesn't get included if they're selling it outside the UK which you haven't factored, but you've left out overheads so you're miles off break even.

There are no other overheads bar those mentioned.

We're only selling to UK customers.

 

[pardoe]

What's the retail price?

£13.

 

[andyhinch]

I think it's probably a turnip, could be wrong though

 

[johnmc]

If it was £10.30

Vat £2.06
Net cost £5
12% fees £1.24
Shipping £2

Break even?

 

[andyhinch]

If it was £10.30

Vat £2.06
Net cost £5
12% fees £1.24
Shipping £2

Break even?

You pay the VAT at time of invoice, might be some interest to pay between then and getting paid.

 

[johnmc]

You pay the VAT at time of invoice, might be some interest to pay between then and getting paid.

Don't know then

 

[aguero93:20]

There are no other overheads bar those mentioned.

We're only selling to UK customers.

9.41, if you're going retail you should look at somewhere around 12 as a retail price.

 

[johnmc]

9.41, if you're going retail you should look at somewhere around 12 as a retail price.

What's your workings on this?

VAT £1.88
12% fees £1.13
Shipping £2
Cost £5

Loss £0.60?

 

[aguero93:20]

What's your workings on this?

VAT £1.88
12% fees £1.13
Shipping £2
Cost £5

Loss £0.60?

5+2=7, 12% of 7 is .84, 7.84 @120% = 9.408.

 

[NPBlue]

£13.

On line fees.

12% of what?

 

[Tuearts right boot]

Do you need to be VAT registered. You need to sell a boat load of stuff at those prices on line to hit the threshold of £83,000.

 

[Gelsons Dad]

Does VAT apply to the "on line fee" ?

What is that fee? If it's a service charge then it shouldn't accrue vat.

 

[johnmc]

5+2=7, 12% of 7 is .84, 7.84 @120% = 9.408.

Ah thanks. When he said 20% VAT on sale I assumed sale price.

 

[OB1]

Does VAT apply to the "on line fee" ?

What is that fee? If it's a service charge then it shouldn't accrue vat.

What makes you think that?

 

[Gelsons Dad]

What makes you think that?

Lack of knowledge of internet service charge tax regulations I guess ;-)