From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Guidance on calculating and declaring profit margins and production costs for customs purposes when importing automobile components.
| Identifier | ExFiles\Box 19\4\ Scan257 | |
| Date | 9th September 1930 guessed | |
| -5- percentage. Manifestly, it would be unfair to apply the usual profit made on your finished automobile to parts which you did not sell and which are not sold by others in England. On the other hand, you will note that in the definitions of "foreign", "export", and the "United States" value, these values are defined as the price at which the merchandise is "freely offered for sale", and it might be considered that if you are satisfied with a profit of say 25% on complete automobiles you would be willing to sell the parts with the same percentage of profit. Again you should notice that in discussing the question of profit the law prescribes that it should equal the profit ordinarily added by purchasers of the same class or kind of merchandise. Taking it all in all, the question of profit in a case of this kind really becomes one of agreement between the importer and the customs officials, and I think it should be discussed with the usual profit on the finished article in mind for purposes of discussion. You will see that the profit contemplated by the law is the net profit over and above every cost incurred in the production of the article sold. In other words, the factory's profit on the finished automobile, as the word profit is defined in the law, means the net return to the company above the entire cost of running the business, including depreciation, replacing the of machinery and tools, waste, etc. etc. Indidentally, I may say here that in figuring your cost of material the waste should be considered and anything recovered in the way of a by-product should be also taken into consideration. To take the matter up from a practical standpoint, I would suggest that your factory get up figures as to each item you contemplate importing, showing the cost of production ascertained along the lines I have indicated above; that you then take this matter up with the customs officials here showing them in detail just how you arrive at the figures at which you propose to enter the goods. It is possible that the officials may accept your figures without question, but it is more than likely that they will desire to check them up, particularly as to the question of general expenses and profit. To do this they will direct the Treasury Agent in London, Mr. Wait, to call at your factory and make a report. | ||