Shein UK Accused of Transferring Vast Income to Singapore to Reduce British Tax

Shein's UK operations have been accused of significantly reducing their British tax payments by transferring about 84% of their UK sales revenue, approximately £1.72 billion, to their Singaporean parent company, Roadget Business Pte Ltd, as 'purchasing costs.' Despite generating £2 billion in UK sales in 2024, Shein paid only £9.6 million in corporation tax, which corresponds to 25% of its £38.2 million pre-tax profits but is considered low relative to its sales volume. Campaigners, including Paul Monaghan of the Fair Tax Foundation, criticize this practice as similar to controversial tax avoidance strategies previously used by major tech companies, highlighting Singapore's lower tax rates and incentives that can reduce effective taxation to as low as 5%. Shein rejects these allegations, asserting their transactions comply with international standards and relevant laws, emphasizing that their UK business operates in a low-margin, high-volume industry. The controversy raises broader questions about the economic value Shein generates in the UK versus what is reported as profit in lower-tax jurisdictions like Singapore, whose operations are ultimately owned from the Cayman Islands. This scrutiny comes amid Shein's considerations for a major stock listing, underscoring the heightened attention on its tax and corporate practices.