"Dave" wrote in message
...
On Fri, 14 Mar 2008 20:55:45 +0000, Larry said:

So, Larry, you think that if the VAT rate is 20%, and I buy parts for
$.80 and resell the assembled product for $1.00, I'm going to have to
collect and pay over to the guvmint $.20 in VAT?

C'mon Dave.
You buy a product for $0.80 which includes VAT. so the product has actually
cost you $0.66 because you can reclaim the VAT,assuming you are registered
for VAT..
You then sell it for $1.00
You do not say whether this is ex or inclusive of VAT
If ex. you must charge $1.20 and pay the goverment $.20 like he said, so
your profit is $0.33
If inclusive of VAT you get $1 and must pay the government $0.13 so you are
left with $0.83 and your profit is just $017.