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Profit Calculation Formula:
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The Resale Profit Calculator is a tool designed to help UK-based resellers calculate their net profit after accounting for purchase costs and VAT obligations. It provides a quick and accurate way to determine the true profitability of resale transactions.
The calculator uses a simple profit formula:
Where:
Explanation: This calculation deducts both the original cost and VAT obligations from the selling price to determine the actual profit earned.
Details: Accurate profit calculation is essential for UK resellers to understand their true earnings, comply with tax regulations, price products competitively, and make informed business decisions.
Tips: Enter all prices in GBP. Ensure you include the correct VAT amount based on current UK VAT rates. All values must be valid (non-negative numbers).
Q1: What is the current VAT rate in the UK?
A: The standard VAT rate is currently 20%, but some goods and services may qualify for reduced rates of 5% or 0%.
Q2: Should I include shipping costs in the calculation?
A: Shipping costs can be included in either the buy or sell price, depending on whether you're absorbing these costs or passing them to the customer.
Q3: How often should I calculate my resale profits?
A: Regular calculation is recommended - ideally for each transaction, and certainly for monthly financial reviews.
Q4: Are there any other deductions I should consider?
A: This calculator focuses on core costs. You may also want to consider platform fees, transaction fees, packaging costs, and other business expenses.
Q5: Is this calculator suitable for VAT-registered businesses?
A: Yes, this calculator works for both VAT-registered and non-registered sellers, though VAT-registered businesses may need to account for input VAT differently.