Julian Dunkerton, CEO of Superdry, has called for increased taxes on Shein, a prominent Chinese fast fashion retailer.
- Dunkerton claims Shein exploits tax loopholes in the UK, avoiding import duty on goods under £135.
- He suggests implementing import duty, VAT, and environmental taxes on Shein to ensure fairness.
- Shein plans to expand its presence in the UK, searching for a new warehouse and possibly listing on the London Stock Exchange.
- Legal experts argue that existing tax frameworks are outdated, benefiting digital-only businesses like Shein.
Julian Dunkerton, the CEO of Superdry, has raised concerns over the existing tax practices benefiting Shein, a Chinese fast fashion retailer. According to Dunkerton, Shein takes advantage of a tax loophole whereby goods valued under £135 are not subject to UK import duties, allowing the retailer to avoid significant tax liabilities despite its large turnover in the UK.
Dunkerton has expressed the need for Shein to pay more in UK taxes, advocating for the imposition of import duty, value-added tax (VAT), and potentially an environmental tax. He argues that the current rules were not designed for companies conducting such extensive operations without a corresponding tax contribution, describing the situation as allowing a company to essentially be a tax avoider.
Recent reports indicate Shein’s intentions for expansion in the UK, with the search for a warehouse in the Midlands and preparations for a possible London Stock Exchange listing. The planned site is expected to be between 300,000 and 400,000 square feet, situated within a key logistics region known as the ‘golden logistics triangle’.
A spokesperson for Shein has responded to these claims, stating that the company operates within the confines of current laws. They attribute their success to a flexible supply chain and an on-demand business model rather than tax exemptions. The spokesperson expressed an interest in collaborating with policymakers and industry peers to reassess the existing frameworks.
Mark Tan, a tax expert from Spencer West LLP, comments that Dunkerton’s statements might cloud the understanding of legal and illegal practices. He notes that traditional tax systems, which are primarily focused on physical business operations, may not adequately address the complexities of digital business models, such as that employed by Shein.
The ongoing debate highlights the need for modernised tax frameworks to address the unique challenges posed by digital enterprises like Shein.
