Calculating Sale Price

Tomthepost

Im in the process of importing goods from Australia and can't get a proper handle of total cost per unit as to decide on a fair sell on charge.
Im hoping someone can give me a definitive formula for this.
I have been in touch with customs. They have informed me that a 2.7% duty fee applies on the product I am bringing in.
In simple terms lets say its 10 euro per unit plus 10 euro delivery per unit would the below be an accurate way of calculating costs
So is it
Cost Per Unit 10 euro
Plus Cost per Unit Delivery 10 euro
Plus 2.7% Duty 2.70 euro
Plus 21.5 VAT 4.88 euro
Total Cost Price 27.58 euro

Im pretty sure the above is wrong and that I have to arrive at sales price and work back from that to calculate VAT amount.
Also wondering would it be in my interests to register for VAT right away or wait until I know for sure I will be trading in excess of 75,000 euro per annum?
By not registering surely its going to eat into my margains?
Any advice would be greatly appreciated.

GerardKeating

Tomthepost wrote: »

Im in the process of importing goods from Australia and can't get a proper handle of total cost per unit as to decide on a fair sell on charge.
Im hoping someone can give me a definitive formula for this.
I have been in touch with customs. They have informed me that a 2.7% duty fee applies on the product I am bringing in.
In simple terms lets say its 10 euro per unit plus 10 euro delivery per unit would the below be an accurate way of calculating costs
So is it
Cost Per Unit 10 euro
Plus Cost per Unit Delivery 10 euro
Plus 2.7% Duty 2.70 euro
Plus 21.5 VAT 4.88 euro
Total Cost Price 27.58 euro

Im pretty sure the above is wrong and that I have to arrive at sales price and work back from that to calculate VAT amount.
Also wondering would it be in my interests to register for VAT right away or wait until I know for sure I will be trading in excess of 75,000 euro per annum?
By not registering surely its going to eat into my margains?
Any advice would be greatly appreciated.

Depends on what you are selling and to whom, if you are selling to business, they will want to reclaim the VAT.

Tomthepost

GerardKeating wrote: »

Depends on what you are selling and to whom, if you are selling to business, they will want to reclaim the VAT.

Largely it will be consumers I will be trading to but there will possibly be businesses as well.

trad

2.7% of €10 is 27cent, if you include transport 2.7% of €20 is 54 cent so that will increase your margin.

Tomthepost

trad wrote: »

2.7% of €10 is 27cent, if you include transport 2.7% of €20 is 54 cent so that will increase your margin.

Thanks. Dont know where I was good with the 2.70:o
So the duty would only be on the cost per unit I take it?
Where am I going with the VAT though?

BarryM3

My understanding of it would be as follows:

Unit cost - €10
Duty @ 2.7% - 0.27
Sub Total - 10.27
Vat @ 21.5% - 2.21
Total Inc Taxes - 12.48 per unit
Add Import Del cost of 10.00
TOTAL LANDED - €22.48 or €24.63 if €10 delivery above excludes VAT

So €22.48 (€24.63)is your cost price for each unit sitting waiting for a buyer. You then set your selling price at whatever level you think the market will bear. Delivery cost to customer can be added later, we'll ignore it for now.

If you register for VAT you can claim back the VAT on imports, delivery charges, advertising etc etc - however the downside is that you will have to charge your customers VAT and that will make your product dearer to them as they (generally) won't be VAT registered and can't claim the VAT back.

I'm not involved in retail in any shape or form, so not sure if that is exactly right but it is how I would think it is!

DubTony

BarryM3 wrote: »

My understanding of it would be as follows:

Unit cost - €10
Duty @ 2.7% - 0.27
Sub Total - 10.27
Vat @ 21.5% - 2.21
Total Inc Taxes - 12.48 per unit
Add Import Del cost of 10.00
TOTAL LANDED - €22.48 or €24.63 if €10 delivery above excludes VAT

So €22.48 (€24.63)is your cost price for each unit sitting waiting for a buyer. You then set your selling price at whatever level you think the market will bear. Delivery cost to customer can be added later, we'll ignore it for now.

If you register for VAT you can claim back the VAT on imports, delivery charges, advertising etc etc - however the downside is that you will have to charge your customers VAT and that will make your product dearer to them as they (generally) won't be VAT registered and can't claim the VAT back.

I'm not involved in retail in any shape or form, so not sure if that is exactly right but it is how I would think it is!

This is close enough. Re the VAT; if the threshold is met (75K p.a. I think) you need to register anyway. VAT doesn't actually make the product dearer, as an unregistered business will add the mark up to the VAT inclusive cost price.


Example.

Unregistered: Product costs the €20 + vat = €24.30
Add 50% markup and sell at €36.45.

Registered: VAT is reclaimed so cost is €20. 50% mark up makes the sale price €30. Add 21.5% VAT for a total of ... wait for it .......... €36.45

kenbrady

Tomthepost wrote: »

By not registering surely its going to eat into my margains?

Largely it will be consumers I will be trading to but there will possibly be businesses as well.

VAT is just a way the government gets you to collect tax for them. It's never your money.

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