Julian Dunkerton, CEO of Superdry, highlights tax advantages enjoyed by Shein in the UK.
- Dunkerton claims Shein benefits from a loophole exempting import duty on goods below £135.
- Superdry’s CEO advocates for imposing import duty, VAT, and an environmental tax on Shein.
- Shein spokesperson defends company’s adherence to existing tax rules.
- Mark Tan of Spencer West LLP cautions on making uninformed tax compliance statements.
Julian Dunkerton, the CEO of Superdry, has raised concerns about the tax practices of Shein, a leading Chinese fast fashion retailer. According to Dunkerton, Shein benefits from a tax loophole in the UK, which exempts goods under £135 from import duty, enabling them to operate extensively without incurring substantial tax obligations. This allows Shein to have a significant footprint in the UK market without contributing to the tax revenue proportionate to its operations.
Dunkerton strongly suggests that Shein should be mandated to pay not just import duty but also VAT and potentially an environmental tax. His statement comes during a time when Shein is reportedly seeking a new warehouse in the Midlands, indicating its expansion within the UK. The CEO’s remarks underscore his position on ensuring fair competition and fiscal responsibility within the industry.
A spokesperson for Shein has responded to these allegations by asserting the company’s compliance with current laws. ‘Shein’s success is attributed to its on-demand business model and an efficient supply chain, which keeps prices low for consumers,’ said the spokesperson, adding that the company looks forward to engaging with policymakers to discuss the fairness of existing tax frameworks.
Mark Tan, an international corporate tax partner at Spencer West LLP, provided a professional viewpoint, describing Dunkerton’s accusation as ‘bold’. He emphasized the complexity of tax laws and the potential for misunderstandings, noting that many tax systems were developed before the rise of digital business models, which now exploit these outdated frameworks. Tan highlighted the importance of understanding Shein’s business model before passing judgment on its legality.
Furthermore, it has been suggested that Shein is preparing for significant growth in the UK, including a potential listing on the London Stock Exchange valued at approximately £50bn. This development underscores the importance of addressing tax concerns while respecting the rapid evolution of digital marketplaces and the unique challenges they present.
As the debate continues, the focus remains on fostering a balanced and fair tax environment that considers the complexities of modern digital commerce.
