pricing advice please!

[Paul]

Hi! I have friendly company that i did few mugs for boss and office staff for free in the passed.
Now they asked me to do about 300 polos and zip hoodies for they stuff.
As I normally not interested doing this stuff for money as not much time and space for bigger project, i can not missed that opportunity
I am NOT self employed and i dont want to be as i am not interested in business etc... so question is...

How would you price this Job?? per item or per lot??

second question is: Is it better to register to do the right thing with taxmen only for this job, or just add it to extra earning on end of the year??
thanks!!!


PAul

[Paul]

No one can help???

[logobear]

large jobs must be priced on the exact specifics of what they want.
What model of polo and hood, printed with what, in what colours, in which locations?
No simple answer here, garments are not like mugs .....

[socialgiraffe]

Hi Paul

Probably the best way to work this out is as follows:

Cost of garment plus mark up for spoils and profit, somewhere between 10% and 50% is the norm
Cost of materials plus mark up for spoils
Plus labour which is whatever you feel comfortable working for

As an example, assuming the garment is £1.50, the material per garment is £1.95 and you are happy to work for £45.00 per hour, would be as follows:

Garment £1.50 + 35% + delivery cost (estimated @ £8.99) @ 300 = £2.05 per garment
Materials £1.95 + 25% + delivery cost (estimated @ £8.99) @ 300 =£2.47 per garment
Labour @ 5 hours @ £45.00 per hour = 75p per garment

Total cost £5.27 per garment

Assuming no spoils and it takes five hours this would make a profit of £1.82 per garment excluding your time

All the above figures have been picked at random by the way.

[Paul]

Fantasric. Thank you very much. This will help me price this job up.

How much tax should i include in this price???

[socialgiraffe]

I presume you are not VAT registered then as I am sure you would know what to charge.

As this is a sideline then it is treated as extra income that you should declare at the end of the tax year. The income is the total profit after any purchases. Tax is calculated on what you earn and is salaray related. For example somone earning £15,000 per year will pay a lower rate of tax than someone earning £50,000. That is very general as tax does get very complicated.

If you want to allow for tax then expect to pay about 25% of the profit you have earnt. You can not pass this on to your customer as TAX but instead just need to allow for it within your prices.

Declaring tax on extra income is something that everyone should do legally, many don't and do get away with it. However if you start out right then there are no reasons to avoid it and it can actually be beneficial. For example, when putting down the amount of income earned you need to deduct money for electricity. It does get very complicated and I would suggest you seek proffessional advice if the sideline takes off. If however its a one off job then the form to complete for the tax man is easy to complete and only needs to be done in January of each year.

If you used the above prices then I would stick £136.50 (25% of the profit) in a seperate savings account. THen when it comes to the year end you have the money sitting there ready to pay.

Lastly, 25% is probably over what you will need to pay but it depends on your current salary and how "clever" you are on what you put through as legitmate expenses.

[Paul]

Thank yo for such informative post. I will xontact my friend accountant.and see what she will propouse me i want to pay tax for thos job and i want to issue proper invoic tocustomer.

[frazzle]

Another point to remember Paul if you are not vat registered you cannot say on invoice ''VAT included'' you cannot mention vat at all.

[mrs maggot]

yes agree with frazzle, you just invoice them, obviously you work your prices out at the price you have paid - which will include VAT, you cannot give them a VAT invoice, as you are not registered for VAT, if you want to pay tax on this income, you will need to declare it to the tax office, they will then of course become interested in everything you do and how often you sell etc - or you just do the work and charge the customer and keep the money - the way probably 45-70% of the people on here do.

[John G]

Surely Paul you'll have been through all the Tax details, and form filling, for your mug templates business - can you not just invoice it from that business?