Sausage Rolls. Is this the true cost?

[Moulder]

Whilst my friend (yes, really) was recently baulking at spending £5.20^ on a sausage roll, I in no way tried to improve the experience by saying it was actually costing him a tenner.

Working this through two non-accountants came up with the below. Example is for a Ltd company director, charges VAT to (non-VAT registered clients) end clients but doesn't offset any of it, doesn't offset any corporation tax, and is in the higher band of tax.

Probably not much different to an employed person, obviously no VAT but NI instead of Corporation Tax.

Headline figures we got were a gross income of £10.85 was required to buy it, and by the first bite £7.81 of tax would be generated.

Is this anywhere near correct?




^ Cotswolds tax

[deggles]

It's unlikely you would pay both 20% Corporation Tax and 40% income tax on the same income. You'd either pay it as salary, which would be deductible for Corporation tax but subject to Income Tax, and NI, or you'd pay it as a dividend so 20% Corporation Tax and then 33.75% income tax.

[Tye Green]

the bigger problem is that he's paying £5.20 for a sausage roll...

[Batfoy]

Tye Green said:

the bigger problem is that he's paying £5.20 for a sausage roll...

The ones at the Ginger Pig in Borough Market are £6.50. They were £3.50 a couple of years ago

[Mazinbrum]

Get to Greggs.

[bitchstewie]

Got to say I've always been a bit of a snob about Greggs but then I tried one of their £1.25 sausage rolls.

OMG they are good

[Wills2]

I'd say the profit on the sausage roll is vastly understated (not sure if that affects the overall thrust of the calculation) but the margin you show is 33.4% not 50% and I doubt they only put on 33.4%, the cost price will be lower and margin higher.

[DodgyGeezer]

on the face of it that is rather lumpy - my favourite sausage rolls are from Gail's and come in at £4.30 which I thought was bad enough

[Earthdweller]

bhstewie said:

Got to say I've always been a bit of a snob about Greggs but then I tried one of their £1.25 sausage rolls.

OMG they are good

We'll make a northerner of you yet

[Moulder]

Wills2 said:

I'd say the profit on the sausage roll is vastly understated (not sure if that affects the overall thrust of the calculation) but the margin you show is 33.4% not 50% and I doubt they only put on 33.4%, the cost price will be lower and margin higher.

You are probably right here, we were aiming for £2.90 in costs, £1.45 in profit. The £2.90 including all business coats, not just materials.

[sideways sid]

So using the same assumptions but scaled up to salary level, (but with 50% of income spent on items taxed the same way) its astonishing to think that HMRC receives about 82% of salary for every working person.

(c.72% of tax raised on salary earned and c.19% on 50% of it spent)

[Tye Green]

bhstewie said:

Got to say I've always been a bit of a snob about Greggs but then I tried one of their £1.25 sausage rolls.

OMG they are good

estimates vary but Greggs sell between 18 & 30 million sausage rolls per year...

[Mr Whippy]

Wills2 said:

I'd say the profit on the sausage roll is vastly understated (not sure if that affects the overall thrust of the calculation) but the margin you show is 33.4% not 50% and I doubt they only put on 33.4%, the cost price will be lower and margin higher.

Yep, my local butchers were both £1.10 and decent in 2016.

By now they’ve suffered shrinkflation (mild) and are £2.40.

They keep saying butter costs, flour etc, but these haven’t gone up that much.

My 2p, they’re profit gouging.

Probably 50p costs + 60p margin in 2016.
£1.10 costs today, £1.30 margin.

[greengreenwood7]

Moulder said:

Whilst my friend (yes, really) was recently baulking at spending £5.20^ on a sausage roll, I in no way tried to improve the experience by saying it was actually costing him a tenner.

Working this through two non-accountants came up with the below. Example is for a Ltd company director, charges VAT to (non-VAT registered clients) end clients but doesn't offset any of it, doesn't offset any corporation tax, and is in the higher band of tax.

I know it was a just an exercise....but here's one for you kind of semi related; had an argument with my company accountant a few years ago, as i was sure that i shoudl be able to have a staff canteen at my workplace ( which was an office in the garden with 1 employee and was self contained). It took a few discussions and them to research to agree that yet, it was allowable.

so my sausage rolls for me atleast came out off the Corp tax bill :-)


@ whippy - do you think that there's that degree of gouging? i've laughed/groaned at the daft inflation figs, many food stuffs that we buy have gone up by 80-110% since 2016/17. In the past 3 years, many have defo gone up by 30% - and that's from places like Aldi who i wouldn't have thought would be consdiered in the 'gouger' context?

[DaveH23]

Mr Whippy said:

Wills2 said:

I'd say the profit on the sausage roll is vastly understated (not sure if that affects the overall thrust of the calculation) but the margin you show is 33.4% not 50% and I doubt they only put on 33.4%, the cost price will be lower and margin higher.

Yep, my local butchers were both £1.10 and decent in 2016.

By now they’ve suffered shrinkflation (mild) and are £2.40.

They keep saying butter costs, flour etc, but these haven’t gone up that much.

My 2p, they’re profit gouging.

Probably 50p costs + 60p margin in 2016.
£1.10 costs today, £1.30 margin.

The ingredients will be such a small element of the cost makeup.

Think gas, electric & water costs.
Insurances
Rent
Rates
Staffing costs

When they go up, the business doesn't foot all of the bill, you do as well.

[Mr Whippy]

DaveH23 said:

Mr Whippy said:

Wills2 said:

I'd say the profit on the sausage roll is vastly understated (not sure if that affects the overall thrust of the calculation) but the margin you show is 33.4% not 50% and I doubt they only put on 33.4%, the cost price will be lower and margin higher.

Yep, my local butchers were both £1.10 and decent in 2016.

By now they’ve suffered shrinkflation (mild) and are £2.40.

They keep saying butter costs, flour etc, but these haven’t gone up that much.

My 2p, they’re profit gouging.

Probably 50p costs + 60p margin in 2016.
£1.10 costs today, £1.30 margin.

The ingredients will be such a small element of the cost makeup.

Think gas, electric & water costs.
Insurances
Rent
Rates
Staffing costs

When they go up, the business doesn't foot all of the bill, you do as well.

So you’re saying all their costs have gone up 240/110 in 8yrs?

218% is 10% a year for 8yrs straight.

I know for a fact their staff aren’t getting double salaries.

So everything else has gone up over 10% a year for 8yrs straight?


I’m gonna dissect one of their uncooked ones and weigh it all out.
Then compare to my receipts for sausages, butter and flour, and their rolls, from 2020.



My gut says taking the piss, but I’d like to be proven wrong because I thought I had more faith in humanity to not go taking the piss with staples like sausage rolls

[droopsnoot]

Mr Whippy said:

My gut says taking the piss, but I’d like to be proven wrong because I thought I had more faith in humanity to not go taking the piss with staples like sausage rolls

At the NEC Classic show today, the Crusty Pie Co. large sausage roll was £7, and I'm sure they were a fiver last year. Steak pies up from £6.50 to £8. They're nice, but not that nice. Some of that is the NEC tax to be factored in of course.

[Granadier]

Expensive food is one thing, but it makes it worse if it’s in a venue where you’ve already had to pay a lot to get in. At least at Greggs they didn’t charge you an admission fee, and there are endless other food options in the high street