(qlmbusinessnews.com Wed. 25th Sept, 2024) London, UK —
“Shein Under Fire: Superdry Boss Calls for Tax Crackdown on Fast Fashion Giant”
Julian Dunkerton, CEO of fashion retailer Superdry, has accused fast fashion giant Shein of exploiting tax loopholes, gaining an unfair competitive advantage in the UK market. Mr Dunkerton claims that Shein benefits from a tax exemption on low-value parcels sent directly to consumers, avoiding import duties that traditional retailers must pay.
Shein, which declined to comment on the specific allegations, has previously attributed its success to an “efficient supply chain” rather than tax exemptions. The company says it complies fully with UK tax laws.
Current UK regulations exempt shipments worth less than £135 from import duties, a rule that was originally designed for a pre-globalised marketplace. Mr Dunkerton argues this loophole is outdated and allows firms like Shein to dominate the market without contributing to the UK’s tax revenue. “We’re allowing a company to act as a tax avoider,” he stated, urging the government to close the loophole.
Shein has also faced environmental criticism, with Mr Dunkerton labelling the company's practices a “complete environmental disaster.” He suggested imposing additional taxes, such as VAT and an environmental levy, to hold companies like Shein accountable.
Retailers such as Sainsbury’s and Next have similarly called for a revision of the import duty system. Simon Roberts, CEO of Sainsbury’s, has urged for a “level playing field,” arguing that all businesses should operate under the same tax rules.
Shein, founded in China but now based in Singapore, has faced growing scrutiny globally. The US and EU are considering reforms to tighten tax policies on direct-to-consumer businesses like Shein and Chinese retailer Temu. In the US, Shein has faced allegations of forced labour within its supply chain, accusations the company denies.
The Treasury has defended its tax policies, stating that they aim to balance the needs of consumers and businesses. An HM Treasury spokesperson emphasised that VAT is applied uniformly, regardless of the product's origin or value.
Superdry, once a fashion giant, has seen its fortunes decline in recent years. Mr Dunkerton, who founded the company over two decades ago, is working to reverse its fortunes and has not ruled out another attempt to take the company private.
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