RE: [cobalt-users] Memory pricing

["Simon Watts" <simon@xxxxxxxxxxx>]

> > and truly no clue on what "VAT" is (other than something you put
> > brewing ale into...)
>
> Value Added Tax; it's much simpler to figure/collect than the U.S.
> "sales tax" system.  There are no exemptions.  Everyone who sells a
> product sells adds the percentage of VAT on the difference
> between what
> he bought it for and what he sold it for.  So there's no
> such thing as a
> "wholesale" exemption.
>
> Jeff
> --
Sorry to disagree but VAT isn't quite as you explain it.

Firstly a company / person / org has to be VAT registered if their
turnover exceeds a govenment set figure.

For VAT registered companies;
Whenever a purchase is made, whether it be between wholesaler and
distributor, Retailer from wholesaler, or consumer from retailer, a
percentage of Value Added Tak is Added to the sellers price. Almost
all products/services sold in the UK are rated at 17.5% VAT. This
value has to be added to the entire value of sale, so if I sell for
?100 I have to add 17.5% to it and that is what I charge my customer.
BUT I can claim back all the VAT I pay out to those people from whom I
buy, so in essence I pay no VAT, just my customers.

For Non-VAT registered companies;
If my turnover is below this preset level I cannot charge VAT to my
customer and therefore my custopmers don't have to pay it to the
government. BUT I cannot claim back the VAT on the price I have paid
for the goods / services.

So for any given sale the government only collects one lot of VAT,
that being taken on the highest value the goods/services changed hands
for. How high this amount is depends upon the turnover of the final
seller.