Quote:
Originally Posted by darryl
The seller then has the obligation to pay to the Government VAT of 20% of the sale price. If the price remains at £3.32 the seller can keep only $2.77 after paying to the Government VAT of £0.55.
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That is not how I understand it to work. The 20% of the sales price is not covered by the last seller in the chain, but divided among everybody, including all middlemen. It ends up 20% of the product price, but everybody pays a portion of that for their own profits.