The boss of the clothing chain Superdry says its rival Shein is being allowed to “dodge tax”, and is urging the government to take action.
Julian Dunkerton told the BBC the fast fashion giant was enjoying an unfair advantage because import duties are not charged on the low-value parcels it sends direct to customers from overseas.
Shein declined to comment, but has previously said that its success was due to its “efficient supply chain”, not tax exemptions.
The Treasury said tax policies had to balance the interests of consumers and retailers.
However, Dunkerton said it would be in the UK’s interests to get rid of this tax “loophole”.
“The rules weren’t made for a company sending individual parcels [and] having a billion-pound turnover in the UK without paying any tax,” said Dunkerton, founder and chief executive of Superdry.
“We’re allowing somebody to come in and be a tax avoider, essentially.”
Shipments worth less than £135 that are sent directly to UK shoppers do not face import duties, but firms bringing in larger consignments do.
Before the arrival of a globalised online marketplace the exemption had limited impact, but retailers in the US and EU are now increasingly being undercut by low-cost Chinese rivals, and state treasuries are missing out on potential tax take.
Dunkerton also described Shein as a “complete environmental disaster”.
“Personally, I would force them into paying import duty, VAT and possibly even an environmental tax,” he told the BBC.
Shein has previously said it complies fully with all its UK tax liabilities. (BBC)
