quotation mark“We allow someone to come to the UK and avoid paying tax.”
Unfair regulation
Parcels sent with a value of less than £135 are exempt from import duties, an exemption that dates back to a time when online commerce was much less developed.
Except that now, companies like Shein, with its direct shipping practices from abroad, are exploiting this regulation, according to Julian Dunkerton, to avoid contributing fairly to the British taxman. “The rules were not designed to allow a company to send individual packages [et] to achieve a turnover of £1 billion in the UK without paying any tax”he said before adding: “Here we are allowing someone to come to the UK and avoid paying tax.”
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Shein, who declined to comment directly on the allegations, said his success is based on a “efficient supply chain”and not on tax benefits.
The UK Treasury also responded by saying that the current tax regime aims to strike a balance between the interests of consumers, British retailers and those of companies that import goods. However, the Superdry boss said the current situation creates a market distortion to the detriment of domestic retailers.
It is important to point out that the British brand has been suffering for a few years. If in 2018 the company was valued at £1.8 billion, it is now worth less than £10 million.
An environmental disaster?
In addition to the tax accusations, Julian Dunkerton also called Shein a ““complete environmental disaster”He suggested that the company be subject to an environmental tax in addition to VAT and import duties.
Shein’s production method, which relies on manufacturing products based on “real-time” demand, has been criticized by industry groups and others for encouraging unbridled consumption and a disposable fashion cycle. Shein, however, defends its method as more efficient than traditional retailers, saying its strategy reduces waste. However, critics persist, pointing out that its low prices and marketing strategy encourage consumers to buy clothes on impulse to wear them only once.
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It is worth noting that the issue of tax exemptions for Shein and other direct-to-consumer companies like Temu extends beyond the Channel. The United States and the European Union have already begun discussions to strengthen their tax regulations for these new e-commerce giants. Indeed, American lawmakers, concerned about Shein’s alleged ties to the People’s Republic of China, have also stepped up their calls for regulation.
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