You are correct
The figures were mark-up and not profit.
I started working in 1974'ish at the age of 14 (tell that to the kids of today) and by that time VAT had taken over from Purchase tax if memory serves so there was no advantage in buying a bike in bits..
I think by that time the "luxury tax" had also gone. Taken over by the 3 day week and riding home at night on the bike with the street lights out as they had been switched off....as they had been in the house so lit by candles.
49 pence a week as a paper boy was dwarfed by what I could earn at the bike shop