Shein is facing a High Court lawsuit in the UK over allegations of customs and VAT fraud. The fast fashion retailer is accused of 'manipulating customs declarations for VAT evasion' on parcels delivered from China to UK customers.
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The claim, lodged by customs agent IT Way Transgroup Clearance and Orange Transgroup, states that the companies acted as agents for Shein between 2021 and 2024. They allege the retailer misrepresented responsibilities around parcels and operated 'under pressure and reputational risk', seeking £5.8m in damages.
A Shein spokesperson responded, calling the accusations 'completely unfounded', asserting that a local service provider is withholding payments and that arbitration proceedings have commenced. The retailer maintained it 'complies with all relevant laws and regulations in each market it operates in'.
This case adds to ongoing criticism of Shein's use of the UK's tax exemption for imports under £135, which avoids import duties. UK retailers including Currys, Monsoon, Primark and Next have repeatedly called for the loophole to be closed, arguing it creates unfair competition.
Chancellor Rachel Reeves committed to reviewing the rule in April, aligning with moves by the US and EU to end similar tax breaks.
Source: www.retailgazette.co.uk