Help

xoxemma89xox

Hey guys,

I am looking for some help/advice... I want to open a small ladies clothing store in no bigger then a 750sq ft... I have sourced a few wholesalers in the uk, question1 do I need to pay customs If I import from the uk?
Also what way does vat work.?? If I were to price a garment at 25euro am I right in saying I minus 23% from the 25 being 5.75 from the 25 leaving me with 20e then minus the cost of the dress?? I think I am confusing myself??

If anyone could give me some pointers on what to do/not to do

Also is anyone aware of rates being wavered on commercial property's??

Thanks guys xox

DubTony

There are no customs charges when purchasing within the EU. If you're VAT registered give your British supplier your VAT number and he won't charge you any vat. If you aren't vat registered you'll pay vat at the appropriate British rate for the items purchased. This only applies for intra EU transactions. When purchasing from an Irish supplier you will be required to pay the vat whether you are registered or not. If registered you will claim back vat paid.

When working VAT back from a retail price the simplest way is to divide by 1.(the vat rate)
e.g.

To find the vat element of a €25 item, calculate like this.

€25.00 / 1.23 (for 23% VAT rate) gives you a retail price of €20.32 + VAT
The vat is 23% of the base price to bring you to your actual retail price. It is not 23% of the actual retail price.

€20.32 * .23 = €4.6736 (€4.68). Add €4.68 to €20.32 for a retail price of €25.

Ideally you'll purchase items at a set price and add the required margin to this. So you should always be adding VAT after you've added your margin to bring you to the actual retail price. If you feel your retail price is too high, you should reduce your margin and then add vat.

In a competitive business where price is dictated by the market (competition) your cost price becomes the most important thing to ensure you have a decent margin, so shopping around and negotiating are important.

xoxemma89xox

DubTony wrote: »

There are no customs charges when purchasing within the EU. If you're VAT registered give your British supplier your VAT number and he won't charge you any vat. If you aren't vat registered you'll pay vat at the appropriate British rate for the items purchased. This only applies for intra EU transactions. When purchasing from an Irish supplier you will be required to pay the vat whether you are registered or not. If registered you will claim back vat paid.

When working VAT back from a retail price the simplest way is to divide by 1.(the vat rate)
e.g.

To find the vat element of a €25 item, calculate like this.

€25.00 / 1.23 (for 23% VAT rate) gives you a retail price of €20.32 + VAT
The vat is 23% of the base price to bring you to your actual retail price. It is not 23% of the actual retail price.

€20.32 * .23 = €4.6736 (€4.68). Add €4.68 to €20.32 for a retail price of €25.

Ideally you'll purchase items at a set price and add the required margin to this. So you should always be adding VAT after you've added your margin to bring you to the actual retail price. If you feel your retail price is too high, you should reduce your margin and then add vat.

In a competitive business where price is dictated by the market (competition) your cost price becomes the most important thing to ensure you have a decent margin, so shopping around and negotiating are important.

Thanks so much., I was doing it 25 then minus the 23 never thought of making my margin first then add vat..

You know what your talking about anything else I should look out for??