Shein UK Faces Allegations of Shifting Majority of Profits to Singapore to Reduce UK Tax

Published: 06 September 2025. The English Chronicle Desk. The English Chronicle Online.

Shein’s UK operations are under scrutiny after accusations emerged that the company has transferred the bulk of its income to its Singaporean parent company to minimise its tax obligations in the United Kingdom. Despite recording £2 billion in sales last year, Shein UK paid only £9.6 million in corporation tax, a figure that aligns with UK tax rules but has raised concerns among campaigners over the low effective tax rate relative to its revenue.

Accounts filed at Companies House reveal that Shein UK’s pre-tax profits stood at £38.2 million in 2024, of which only a fraction was subject to UK corporation tax. Approximately 84% of the revenue, amounting to £1.72 billion, was reportedly transferred to its parent company, Roadget Business Pte Ltd in Singapore, as a purchasing cost, leaving very little profit in the UK. Paul Monaghan, chief executive of the Fair Tax Foundation, described the practice as “a new wild west for tax,” likening it to strategies previously criticised in big tech companies such as Amazon, Apple, and Microsoft.

The transfer of income to Singapore, which has a lower headline corporate tax rate and additional incentives that can reduce effective rates to as low as 5%, has amplified concerns about tax avoidance. The Singapore operation reportedly paid an average corporation tax rate of 9.4% between 2021 and 2023. Campaigners argue that a significant portion of the economic value generated by Shein UK is booked outside the country, limiting the corporation tax payable domestically.

Shein has dismissed the allegations as “preposterously wrong,” stating that its UK business purchases goods from its principal in Singapore at arm’s length prices, a standard practice in international commerce. The company also emphasised that it operates within all applicable laws and regulations and pays all relevant taxes in the UK where required. The ultimate ownership of Shein’s Singapore business is registered in the Cayman Islands, a known tax haven, which adds further complexity to the structure.

The debate around Shein’s tax practices also intersects with customs duty concerns. The UK de minimis rule allows overseas sellers to send goods valued at £135 or less without paying customs duty, a measure that Shein has used to its advantage. Estimates suggest that if the company had not benefited from this exemption, it could have faced up to £200 million in additional duties. Chancellor Rachel Reeves is reviewing the rule in light of growing concerns over the influx of Chinese goods into the UK. Data from HM Revenue and Customs indicates that £3 billion worth of low-value parcels from China accounted for 51% of all small parcels shipped to the UK last year, up from 35% in the previous year. Similar exemptions are being phased out in the US and EU, highlighting international scrutiny of low-value imports.

As Shein prepares for its anticipated float in Hong Kong rather than London, the scrutiny over its UK tax practices is likely to remain a prominent issue, reflecting broader concerns about tax fairness, cross-border profit shifting, and the economic impact of multinational retailers operating in the UK.