Aussie Online Fashion House
How an Australian Fashion Retailer Recovered Over A$1.37 Million in VAT, Duty & Sales Tax Using Sell to Europe
Client profile (anonymised)
-
Sector: Online fashion retail (DTC)
-
Headquarters: Australia
-
Sales markets: United Kingdom & European Union
-
Fulfilment: Cross-border (non-UK / non-EU origin)
-
Product mix: Clothing, Apparel, Accessories
Annual Sales Performance (12 Months)
Market
Local Currency Revenue
United Kingdom £6,000,000
European Union €4,800,000
Operating Parameters
Metric
UK EU
Return rate 29% 22%
% sales above deminimis
65% 60%
Import duty ( avg.) 10% 10%
VAT / Sales Tax 20% 20%
De-minimis threshold £135 €150
Returned Sales Values
​
Overall Returned Sales Value - incurred VAT
UK £6,000,000 × 29% = £1,740,000
€4,800,000 × 22% = €1,056,000
Returned Sales above deminimus - incurred Duty
UK £1,740,000 × 65% = £1,131,000
EU €1,056,000 × 60% = €633,600
Total Tax & Duty Recovered
Market Duty AT / Sales Tax Total
UK £113,100 £348,000 £461,100
EU €63,360 €211,200 €274,560
​
When converted to Australian dollars that resulted in the business being able to recovering A$1,329,000 for the year.
The next step in the journey
The label is now working with us to modify their model to address the new European Union Handling fee of 3EURO that will be charged for all low value items from July 1st 2026.
In parallel, we ware working with them on a plan to implement a B2B model that removes the need for their EU distributors to pay the 20% VAT fees up front.
Did the client need to:
1. Change their Logistics partners - NO
2. Pay any additional up front costs - No our fees are only paid from VAT & Duty funds recouped on the clients behalf.
3. Change any of their warehousing and/or operations - NO, small changes required in invoice structure only.
4. Supply significant resource and staffing to set the service up - NO, apart from responding to authorisation emails most of the work is completed by The Sell To Europe partners.
What they said
"WE have now reduced the pain of cross border returns and can scale our European activities without destroying our margins. And that is just in year one" CFO