Calculating Vat

Mo patel

Free Member
Oct 20, 2021
Hiya Guys

We are looking to import an item which will cost us £6.00 including shipping, after adding Import duty 10% plus Vat it will cost us £7.92.

Now when we resell the item at 10% GP it would cost us £8.80, plus adding vat our total cost would be €10.56.

Is £10.56 the correct amount we charge our customers. Is our method correct, we would appreciate all the help


Free Member
Jan 22, 2018
What Japancool said. Forget the vat. Your cost price is £6.60.

if you want 10% margin then your selling price before VAT is £7.33 I.e. £0.73 profit.

Your selling price after VAT is (£7.33 x 1.2) = £8.80. You owe this £1.47 to the government, less the import vat.

So to work it back:

Your takings are £8.80

your costs are:
£6.60 (item plus import duty)
£1.22 to the Govt in import VAT
£0.25 to the Govt in sales out VAT (£1.47-£1.22)
Total cost £8.07

meaning profit is £8.80-£8.07 = voila your £0.73 profit you were looking for.
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