Shein accused of avoiding UK taxes in High Court case

Digital fashion retail giant Shein has been accused of committing customs and VAT fraud while delivering parcels from China to UK customers.

The business has been hit by a High Court lawsuit over claims of “manipulating customs declarations for VAT evasion”, according to The Telegraph newspaper.

Customs agent IT Way Transgroup Clearance, which lodged the claim alongside Orange Transgroup, says it acted as an agent for Shein between 2021 and 2024.

The firm claims it worked with the retailer “under pressure and reputational risk”, and argued that Shein had “misrepresented parcel responsibility”. It is seeking damages worth £5.8 million from the retailer.

A spokesperson from Shein told Retail Gazette that the allegations were “completely unfounded”.

“A local service provider is withholding repayment of monies to Shein. Shein has begun arbitration proceedings against the service provider.

“The allegations that have been made against Shein are completely unfounded. Shein complies with all relevant laws and regulations in each market it operates in and will defend and pursue its legitimate interests rigorously,” it added.

A tax loophole in the UK allows companies to import products worth less than £135 without paying import duties.

Chancellor Rachel Reeves pledged to review the loophole in April following the US and EU’s decision to scrap similar tax breaks in their respective regions.