Shein Faces Increased UK Pressure Amid Fresh Tax Evasion Claims

Shein, new front opened in the United Kingdom. The Asian ecommerce giant has received a second complaint in the country related to its non-compliance with tax rules. According to the Fair Tax Foundation, Shein Distribution UK Ltd, the company through which the giant operates in the UK, has transferred “a large part of its revenue” to its parent company in Singapore.

According to the information deposited by Shein in the British registry and collected by The Guardian, the ecommerce company paid a total of 9.6 million pounds (eleven million euros) in 2024 in the form of taxes. The figure, denounced from the entity, represents only 25% of the total pre-tax profit of the company, which at the end of the year stood at 38.25 million pounds (44.4 million euros).

Fair Tax Foundation has attributed this to the fact that of the £2 billion (€2.38 billion) sales scored by Shein in the UK in 2024, around 84% were transferred to the group’s parent company, Singapore-based Roadget Business Pte Ltd. “So the figure subject to UK corporation tax is very small,“ complained Paul Monaghan, the entity’s CEO.

Shein would have paid 25% tax on its sales in the country.

“Shein’s UK accounts reveal large movements with its parent company in Singapore, which involve the transaction of most of the revenue to the Asian country as a purchase cost,“ he continued. According to Monaghan, Shein would thus benefit from the 17% tax that companies in Singapore are subject to, as opposed to 25% in the UK, along with a number of incentives that companies in the Asian country are eligible for.

The giant has rejected the entity’s accusations, attributing these moves to “standard practice in international trade.“ Shein has also described as a “standard corporate structure” the company’s organizational chart, whereby the ultimate owner of the Singapore business is based in the tax haven of the Cayman Islands.

This is the second tax complaint the company has received in the UK, amid an increasingly complicated jump to the London stock exchange. In mid-June, customs company IT Way Transgroup Clearance accused Shein of manipulating customs declarations for its products, thereby avoiding paying VAT on them.

Increased scrutiny of Shein in the country, a scrutiny increasingly similar to that to which the company is subject in France, has complicated its plans to list on the London Stock Exchange. Just this summer, the company filed for an initial public offering (IPO) on the Hong Kong Stock Exchange, shortly after the China Securities and Exchange Regulatory Commission (CSRC) rejected the same application in the UK.