Who pays VAT?
VAT is 17.5% of the total cost of the dress. Therefore, she should work out the price (usually 3 x the amount she paid) and then add 17.5% of that amount. For example: £100.00 dress (bought) £300.000 (mark up) 17.5% of 300.00 = £52.50 £352.50 (price tag in shop) VAT gets paid to the Government at the end of the Tax year (although she should be able to write a lot of it off against tax deductable spending – shop related, travel, etc). The “profit” is the amount the dress was sold for, minus the VAT, minus the amount she paid for it. Contact the Inland Revenue if you need more information.
