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What does pricing my patterns "including VAT" mean?

Pricing your patterns including VAT means all customers worldwide will pay the same price for your pattern. You will account for the cost of VAT in your pattern price and your profit will vary depending on the VAT rate in the buyer's country. No VAT will be deducted in countries where VAT doesn’t apply, whereas in the EU the VAT deducted may range between 17% and 25%, dependent on where the pattern is sold.

VAT-inclusive pricing, as an example during the promotional period when commissions are waived:

 

  • Let’s say you, as a designer set the price of your pattern at £5.00
  • If this pattern sells to a customer in Germany, where VAT is charged at 19%, the price the customer will see and pay is £5.00
  • When a sale of this pattern is made in Germany, we’ll pay you £4.20, keeping the 80p to pay the VAT
  • If this pattern sells to a customer in Australia, where there is no VAT, the price the customer will see and pay is £5.00
  • When a sale of this pattern is made in Australia, we’ll pay you £5.00, as no VAT is due
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