beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

# Case studies: Valuation Method 4(b)

## Case study - usual profit and general expenses

### Facts

Goods are imported and it is established that they are sold to unrelated buyers at various prices depending on quantity purchased. Sales are made at £85, £90 and £95 at a ratio of 10:8:7. The greatest aggregate quantity selling price is therefore £85.

Following examination of the trading accounts, it is agreed with the importer that the profit and general expenses element is 15% of the total sales figures. This figure is in line with the norm for the particular trade.

### Calculations

From this information, the percentage deduction appropriate to the unit price may be calculated.

 10 units sold at £85 8 units sold at £90 7 units sold at £95 25
 Deduction of 15% for usual profit and general expenses = 335.25 Net duty inclusive customs value of one item = £2,235 - 335.25 25 = 75.99

The difference between the net duty inclusive customs value of £75.99 and the unit price of £85 is £9.01; and this represents 10.6% of the unit price in the greatest aggregate quantity.

### Conclusion

The allowable deduction in respect of the usual profit and general expenses from the unit price in the greatest aggregate quantity is therefore 10.6%.