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# VAT Flat Rate Scheme. How do I work out profit on my sales

VAT Flat Rate Scheme.How do I work out profit on my sales with the above scheme?For example, if my selling price is £10 plus VAT = £12
My Cost Price is £5 plus VAT = £6If the VAT payable under the Scheme is 4% of turnover is it 4% of £10 or £12, and then how do I go on to calculate the profit on the sale?Thank you in advance.Regards,

Many thanks

Profit calculation - VAT Flat Rate Scheme

Selling price £12.00 (incl VAT)

Cost price £6.00 (incl VAT

Margin £6.00

VAT payable £0.48 (4% of total sale incl VAT under the scheme)

Net profit £5.52

Hi there

Just checking to see if you need further clarification on how to calculate profit on sale or have I answered your question.

Many thanks

Customer: replied 1 year ago.
Hi,Thank you for your answer.What is confusing me, is that £2 of the selling price in my example is VAT, and if we were asked to produce a VAT invoice, it would be:Goods - £10
VAT - £2
Total - £12So, even though we would only be paying over 48p to the VATman, would a calculated net profit of £5.52 not mean that we are actually making a profit out of VAT?Regards,