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British retail giants are mounting pressure on the government to mirror Donald Trump’s decisive action against a tax loophole currently benefiting Chinese e-commerce powerhouses Shein and Temu. The leadership teams of prominent UK retailers including Ryman, Robert Dyas, Superdry and Hawes & Curtis are advocating for the elimination of what they describe as an “unfair” provision allowing Chinese online retailers to circumvent customs duties through direct-to-consumer small order shipments.
Theo Paphitis, who owns Boux Avenue, Robert Dyas and Ryman, has issued a stark warning, stating the continued allowance of overseas companies to dodge customs payments would be “suicide” for British industry. The former Dragons’ Den star emphasised the competitive disadvantage faced by UK retailers, pointing out the disparity in operating costs when foreign competitors avoid import duties, VAT and national insurance contributions.
The current UK legislation enables overseas retailers to bypass import duties on shipments valued below £135, while packages exceeding this threshold may face customs duties up to 25 per cent. This arrangement has sparked significant concern within the British retail sector, with Superdry co-founder Julian Dunkerton strongly supporting Trump’s approach, advocating for consolidated taxation of Chinese trade with the UK.
The Treasury has defended its position, stating their customs and tax framework aims to balance reducing burdens for businesses and consumers purchasing lower-value overseas goods while protecting UK business interests. However, industry experts argue this stance is causing substantial revenue losses for the British economy.
The potential impact of these discussions extends beyond immediate tax considerations, potentially affecting Shein’s planned £50 billion flotation on the London Stock Exchange. While such a listing could deliver significant economic benefits to the UK, retail leaders argue the long-term costs of maintaining the current tax loophole could far outweigh any immediate gains from the flotation
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