Shein faces fresh lawsuit in claims of dodged taxes

In documents from the High Court seen by The Telegraph, Shein is accused of “manipulating customs declarations for VAT evasion” when delivering packages from China to the UK.

Customs agent IT Way Transgroup Clearance and Orange Transgroup put in the claim last month. The former says it acted as an agent for Shein between 2021 and 2024.

It alleges to have worked with Shein “under pressure and reputational risk”, adding that the retailer “misrepresented parcel responsibility”. It is now seeking £5.8m in damages from Shein.

The fresh allegations arrive following scrutiny over its use of a tax loophole in the UK, as retailers such as Argos, Currys and Primark criticise the practice as many claim it undercuts their prices.

Known as the de minimis rule, retailers sending products worth less than £135 are excluded from paying UK import duties. Chancellor Rachel Reeves has recently said the government would review the loophole.

Due to US clampdowns on the de minimis rule, Shein has increased prices for shoppers in the US by up to 377%.

In regards to the new lawsuit, a spokesperson for Shein told The Telegraph it does not comment on “ongoing litigation”.

The retailer has also always argued that it complies with all tax policies and pays applicable tax.