Cost of Sale Enquiry

anno1664

Hi All

When working out my gross profit I take material cost away from sale cost.
As I am not VAT registered, am I allowed to include the VAT in the material cost or do I have to use the cost without the vat
For example

Receits = £200
Cost of Material is £10 without VAT or £12 with VAT

So is my gross profit £190 or £188

I need to know this to work get my books in order ready for the year end in April
I run a simple business on eBay so my books are quite simple and I will never be VAT registered

Regards

Neil

pjclar02

As you are not VAT registered, your cost of sale will be the VAT inclusive amount.

katz03

profit is £188 as the cost to you was £12 as you cant claim the VAT back