How VAT Is Treated in StoreHero

Overview

StoreHero pulls VAT and tax information directly from your Shopify store. This ensures the revenue and profitability metrics you see inside StoreHero match what actually happened in your Shopify data.

To keep your performance metrics accurate, StoreHero automatically excludes VAT from all revenue, profitability, and customer value calculations. This prevents VAT — which is a government tax, not income — from inflating your numbers.

How StoreHero Handles VAT

VAT is always removed from the following metrics:

• AOV (Average Order Value)

• Net Sales

• Contribution Margin

• New Customer Contribution Margin

• LTV (Lifetime Value)

• CAC (Customer Acquisition Cost)

• Payback Period

• Gross Profit

This means StoreHero always uses ex-VAT revenue, giving you a realistic picture of the money your business actually keeps.

Why VAT is excluded

VAT is not retained by the business. Including VAT would artificially inflate:

• AOV

• Revenue

• LTV

• Profit margins

• Payback speed

By removing VAT, StoreHero ensures all these metrics reflect the true financial performance of your D2C business.

Why StoreHero AOV or Net Sales May Differ From Shopify

Shopify often shows AOV and Sales including VAT, while StoreHero always removes VAT.

Example:

This difference is intentional and expected.

How VAT Impacts Each Metric

AOV

Displayed without VAT. This gives a more accurate measure of true revenue per order.

Net Sales

VAT is always stripped out. This prevents inflated revenue reporting.

LTV (Lifetime Value)

VAT is excluded before calculating the gross profit generated by a customer over time.

CAC (Customer Acquisition Cost)

Ad spend does not include VAT, so comparing CAC to ex-VAT revenue keeps the relationship accurate.

Payback Period

Payback uses gross profit, which excludes VAT. This ensures the payback window reflects real profitability.

Important Notes About VAT Configuration

1. VAT settings must be updated in Shopify

If VAT rates change or were missing, update them in:

Shopify → Settings → Taxes & Duties

2. Shopify does not backdate VAT

Any VAT configuration you change today will only apply to future orders, not historical ones.

3. Product-level VAT toggles do not affect StoreHero’s revenue

They are only used for specific BEP calculations — not for Net Sales, Profit, or Customer metrics.

Summary

StoreHero always calculates your profitability and customer value using ex-VAT revenue, ensuring your financial metrics are accurate, comparable, and meaningful.
If StoreHero’s AOV or Net Sales appear lower than Shopify’s, this is because VAT has been removed — which is the correct way to measure true performance.