Speaking to the BBC, Dunkerton claims that Shein is able to “dodge tax” by sending low-value parcels directly to UK customers, which do not incur import duties.
Shipments valued under £135 ($180m) are exempt from import duties, a rule Dunkerton believes was not intended for companies with billion-pound turnovers. He argues that this tax exemption allows Shein to avoid paying import duties and VAT, disadvantaging UK retailers like Superdry.
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By GlobalData“We’re allowing somebody to come in and be a tax avoider, essentially,” says Dunkerton. He urges the government to close this loophole, adding that it would be in the UK’s best interest to do so.
Shein had not responded to comment directly on Dunkerton’s claims but has previously stated to the BBC that its success is due to its “efficient supply chain” rather than tax exemptions. The company has also emphasised that it complies with all UK tax laws.
An HM Treasury spokesperson responded to the BBC by saying the UK’s tax regime aims to balance reducing burdens for consumers and businesses with the interests of UK retailers. VAT, they add, is charged at the same rate on all goods, regardless of their origin or value.
Dunkerton also criticises Shein’s environmental impact, calling it a “complete environmental disaster.” He suggests that the government should impose additional taxes on Shein, including environmental taxes.
Shein has faced growing scrutiny, not only in the UK but also in the US and EU.
The fast fashion company filed initial documents for a London listing earlier this year after a potential New York listing came under fire from both Republican and Democrat politicians.
US senators were concerned about Shein’s potential ties with the People’s Republic of China (PRC) and the Chinese Communist Party (CCP).
Lawmakers in the EU are considering changes to tax policies that would impact direct-to-consumer businesses like Shein.
The company has also been accused of using forced labour in parts of its supply chain, allegations it denies, stating that it has a “zero tolerance for forced labour.”
Founded over 20 years ago, Superdry rose to fame with its Japanese-inspired designs and was valued at £1.8bn in 2018. However, the brand has struggled in recent years, and in July 2024, it was de-listed from the London Stock Exchange. Despite the challenges, Dunkerton tells the BBC he remains committed to turning the company’s fortunes around and is considering taking it private once again.
