Labour is resisting calls to close a tax loophole utilised by fast fashion giant Shein ahead of its planned London IPO.
While some retailers and tax campaigners have called on the party to take measures against the company’s use of the loophole, Labour insisted it had no plans to do so, the Financial Times reported.
Labour claims Shein’s listing, which would bring in a valuation of around £50bn, should be welcomed by the London Stock Exchange, insisting it would lead to higher regulatory standards for the Chinese giant.
However, UK retailers have called the tax loopholes used by online only companies unfair.
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Although some of the party’s figures reportedly privately think Labour should close the loophole if it wins the election, a spokesperson for shadow chancellor Rachel Reeves said the party would not deal with the issue.
Shein does not currently have to pay import duties due to it shipping small packages direct to shoppers, instead of via distribution centres.
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.”
The fashion retailer claimed it was “fully compliant with all tax policies and pays applicable taxes including corporation tax, VAT and employment taxes”.
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