The newly appointed business secretary has warned that the tax “loophole” being exploited by Shein is a cause for concern.

Shein phone 2

The new business secretary has raised concerns about a Shein tax “loophole”

Jonathan Reynolds, who was appointed by Keir Starmer last week, told Times Radio that if Shein were to get the green light for a London listing, it would be expected to meet “ethical and moral targets [on] all business aspects”.

He added that he would want to discuss issues with Shein if it were to consider further business activity in the UK.

“When any company is active in the UK, our aspiration should be that we regulate that company from the UK,” he said.

The news comes as Shein faces ongoing pressure over the way it ships products directly to Western countries from China in smaller parcel sizes, rather than transporting bulk levels of stock to fulfilment centres in the UK, to avoid paying import duties.

With shipments worth less than £135 currently avoiding tax charges, the retail industry is being called on to review methods used by overseas retailers and brands selling cheap products, such as Shein and Temu.

Reynolds’ concerns follow others from the British Fashion Council, who called the potential listing by Shein a “significant concern” to the industry due to unanswered questions about its business practices.

Shein has dominated retail headlines recently as speculation continues to swirl around a potential London IPO.

With the EU planning to impose a customs duty on cheap goods, the retailer’s highly anticipated £50bn float could be halted.