Global fashion behemoth SHEIN is in the cross hairs of a UK high court case, with allegations of customs declaration manipulation to avoid value-added tax (VAT) being paid on deliveries from China to UK buyers.
In a report by The Telegraph, a High Court action has been issued against the company by customs clearance agent IT Way Transgroup Clearance and its subsidiary Orange Transgroup. The companies claim SHEIN systematically misreported parcel information from 2021 to 2024 to prevent VAT liabilities and are claiming US $ 7.81 million in damages.
IT Way asserts in the court pleading that it represented SHEIN’s interests at the time “under pressure and reputational risk,” and contends that the fashion retailer misrepresented its duties in shipping.
In response to the allegations, a SHEIN spokesperson informed Retail Gazette that the allegations were “wholly unfounded.” The company claimed that an in-country service provider is refusing to pay SHEIN repayments due, which has led the retailer to launch arbitration proceedings. “SHEIN abides by all applicable laws and regulations in each market in which it operates and will protect and pursue its legitimate interests aggressively,” the spokesperson further added.
The case is delivered at a time when increasing attention has fallen on tax loopholes used by e-commerce giants. As it stands, items worth less than £135 are exempted from import duties under existing UK laws—an aspect that critics argue benefits cheap cross-border sellers. In April, Chancellor Rachel Reeves indicated her intention to review the policy, following recent actions by the US and EU to remove similar exemptions across their territories.
