Labour is reportedly resisting calls to close a tax loophole exploited by fast fashion brand Shein as it plots its London IPO. 


Shein avoids paying import duties by shipping small packages direct to shoppers instead of via distribution centres

According to a report in the Financial Times, while some retailers and tax campaigners have called on the party to take measures against the etailer’s use of the loophole, Labour has resisted calls to do so. 

The party has said Shein’s listing should be welcomed by the London Stock Exchange, and the predicted £50bn float would lead to higher regulatory standards for the business. 

At present, Shein does not have to pay import duties since it ships small packages direct to shoppers, instead of sending them through distribution centres.

It is reported that although some members privately believe that if Labour were to win it should close the loophole, a spokesperson for shadow chancellor Rachel Reeves said the party would not deal with the issue.

Tax Justice UK head of advocacy and policy Rachael Henry said: “The fact the US and the EU seem to be paying closer attention to the tax arrangements of global online retailers signals that an incoming government in the UK should do the same.”

Shein said it was “fully compliant with all tax policies and pays applicable taxes including corporation tax, VAT and employment taxes”.