If you set your shelf prices with VAT already included, it is simple for the customer, and it hides something from the seller: part of every price on the shelf belongs to HMRC. When a store tracks revenue from the shelf price, its margins look better than they are, and discounts look cheaper than they are.
This guide covers the VAT points that are easiest to get wrong in margin maths, works through an example, and then explains the Founding 10,000: twelve months of ORVX Core, free, for eligible Shopify stores.
Every example and amount on this page is illustrative. It shows the method and is not a benchmark, a quote or advice.
The VAT basics that touch margin
The VAT registration threshold in the UK works on a rolling year: a business has to register for VAT when its taxable turnover for the last 12 months goes over £90,000, the VAT threshold. The standard rate is 20%, with a reduced rate of 5% for some goods and services. Once a store is registered, VAT on its sales is collected for HMRC, not earned (Source: GOV.UK (HM Revenue & Customs)).
At the standard rate, a VAT-inclusive price equals the net price x 1.2. So the VAT inside any price is one sixth of it, and the net revenue is the price divided by 1.2. That one-sixth is the number to keep in mind for everything below.
For anyone selling online in the UK, VAT on imports matters too. For goods in consignments of £135 or less sold directly to UK customers, the seller charges and accounts for VAT at the point of sale, and where the sale goes through an online marketplace the marketplace can be the one liable to account for it. If you sell both on your own Shopify store and through a marketplace, the VAT treatment of the same product can differ by channel, and your margin reports should reflect that.
Worked example: the shelf price and the discount
As an illustration only, suppose a VAT-registered store sells a product at £48 including VAT. The VAT inside is £48 / 6 = £8, so the net revenue is £40. Assume the unit cost is £14, shipping and packing £4.20, card fees 1.5% of the price plus £0.25, and the ad cost per order £7.
| Line | Full price | 20% off |
|---|---|---|
| Price paid, including VAT | £48.00 | £38.40 |
| VAT (one sixth) | -£8.00 | -£6.40 |
| Net revenue | £40.00 | £32.00 |
| Unit cost | -£14.00 | -£14.00 |
| Shipping and packing | -£4.20 | -£4.20 |
| Card fees | -£0.97 | -£0.83 |
| Ad cost per order | -£7.00 | -£7.00 |
| Profit per order | £13.83 | £5.97 |
At full price the order leaves £13.83. The 20% discount takes £9.60 off the shelf price, but because the costs do not move, profit per order falls from £13.83 to £5.97, a drop of about 57%. A store that measured margin on the £48 shelf price would have believed the full-price order kept £21.83, because it would have counted the £8 of VAT as its own.
The same example explains a common surprise at the threshold. A store below £90,000 that is not registered does not charge VAT, so its £48 price is all revenue. If it registers and keeps the same shelf price, £8 of every sale becomes VAT, and net revenue per order falls to £40 overnight. The Product Pricing Calculator shows the net price your costs require; add VAT on top to get a shelf price that keeps your margin (Source: GOV.UK (HM Revenue & Customs)).
What UK sellers should check
- Confirm that revenue in your reports is net of VAT, not the shelf price.
- Recalculate the margin on your most discounted products using net revenue. The Profit Margin Calculator works per order; enter the net price.
- Watch your rolling 12-month taxable turnover if you are below the threshold, and plan prices before you cross it.
- If you also sell through a marketplace, compare the margin by channel rather than in one blended figure.
- Before matching a rival's price, check what their public catalog really charges. The Competitor Store Analyzer reports observed prices per currency, without converting them.
VAT rules have exceptions for particular goods and situations. Use HMRC's guidance and an accountant for your own case; the arithmetic above is the part a margin report has to get right.
The Founding 10,000, in plain terms
ORVX exists to help growing brands see their real numbers, not only revenue. The Founding 10,000, which ORVX calls the USD 1.9M Commerce Initiative, offers eligible Shopify stores a year of ORVX Core for nothing: 12 months at USD 0, with no credit card. Places go to the first 10,000 eligible stores that activate, and that pool is shared by stores in every country.
The $1.9M is a calculation: 10,000 stores x $190 standard annual Core price = $1,900,000, the most the offered subscriptions are worth at standard prices. Nobody receives that money. It is not cash, funding, a grant or revenue.
After the year, Core is the standard $19 per month or $190 per year, and only if you approve it. ORVX prices are in US dollars. Intelligence is not included and stays $39 per month or $390 per year. The offer is ORVX's alone: it is not a government scheme, and Shopify does not fund it.
What you get with Core
- Real profit per order, product and collection: revenue, product costs, gross profit, margin, expenses and net profit, each traced to its orders.
- Your Shopify orders, products, refunds and fulfilment, kept in step with the store.
- Reports for any date range in your store's currency and time zone, so a UK store reads its figures in pounds.
- Customers with their orders and what each is worth to the business.
- Inventory: stock on hand and the money tied up in it.
- Ad spend from Meta and Google counted in net profit, with MER and AOV.
- Read-only connections to Shopify and your ad accounts, and alerts when a number needs a look.
Core reports on the figures your store records. It does not prepare VAT returns, and it does not include Intelligence features such as Ask ORVX, NOVA's recommendations or forecasting.
Claiming a place
- Connect your Shopify store, either by installing ORVX from the Shopify App Store or by connecting it to an orvx.ai account.
- ORVX checks eligibility: a live store, no earlier allocation, and places still open. Development and test stores are excluded, and stores already on a paid ORVX plan stay on it unchanged.
- Activate Core. The 12 months run from that day, and the end date is shown in the app. You are reminded 30, 7 and 1 days before it, and nothing is charged automatically.
Full terms and the live count of places left are on the Founding 10,000 page. Standard plans are on the pricing page.
Frequently asked questions
Can UK stores join the Founding 10,000?
Yes. Eligible Shopify stores in the UK can claim a place, from the same shared pool of 10,000 places that stores in every other country draw on.
ORVX prices are in US dollars. What does that mean for a UK store?
The Founding year costs nothing. If you continue afterwards, Core is billed at the standard price in US dollars. Your reports in ORVX use your store's own currency.
Does ORVX handle VAT returns?
No. ORVX reports on your store's numbers; VAT registration, returns and payments stay with you and your accountant.
Do I need to enter card details?
No. Founding Core needs no card and no checkout, and nothing is charged during the 12 months.
Is this connected to HMRC or any UK scheme?
No. It is ORVX's own offer, not a government scheme, and Shopify does not fund it.
What does the $1.9M figure mean?
10,000 stores multiplied by the $190 standard annual Core price. It is the maximum value of the subscriptions offered, not money paid to stores.
Sources
- The $1.9M Commerce Initiative: terms and FAQ (ORVX, checked 26 October 2026)
- VAT registration: when to register (GOV.UK (HM Revenue & Customs), checked 26 October 2026)
- VAT rates (GOV.UK, checked 26 October 2026)
- VAT and overseas goods sold directly to customers in the UK (GOV.UK (HM Revenue & Customs), checked 26 October 2026)
- VAT and overseas goods sold to customers in the UK using online marketplaces (GOV.UK (HM Revenue & Customs), checked 2 November 2026)
General information only: tax, duty and import rules change and depend on your situation, so check with an accountant or the official source before acting.