New UK business minister concerned over Shein tax loophole, supply chain

A London Stock Market IPO by Shein would lead to a possible investigation into its tax arrangements and questions over its supply chain, the UK’s new Business Secretary has said.

There had already been speculation that this would be the case, but Jonathan Reynolds saying as much while actually in government (rather than as possible Business Secretary pre-general election) underlines that the new administration is taking the issue seriously.

Expressing concerns, Reynolds said the fast fashion retailer would be expected to meet “ethical and moral targets” on “all aspects of business” if it listed in London.

Reynolds said he’s “concerned” about a “loophole” which allows firms to avoid import duties by shipping small packages directly to customers, adding tat he’d “expect every company in the UK to pay its fair share of tax”.

He also said he’d want to discuss the issue with Shein if it was considering further business activity in the UK.

Also asked if he would welcome Shein listing its shares in London, Reynolds told the Times Radio: “I would because where any company is active in the UK, our aspiration should be that we regulate that company from the UK.

“That’s how we make sure that there are not things going on in terms of Labour practices or tax practices or environmental things that we’re not happy with.”

After questions have arisen over allegations that Shein uses Uighur forced labour in the production of some of its clothes, Reynolds also said: “To be absolutely clear, if any company had forced labour in its supply chain it shouldn’t be doing business in the UK at all, it shouldn’t be a question of where it lists.

“But where companies are active [here], the best way we make sure they hit the standards we want to see is for them to be regulated from the United Kingdom and therefore if a listing was to be made, I’d want that listing to be here in the UK.”

Underlining the integrity of the London Stock Exchange he said that “any publicly listed company in this country has to hit very high standards in terms of the disclosure of their working practices”.

In May, Shein said it was investing tens of millions of dollars in “strengthening governance and compliance across our supply chain, as well as in empowering our suppliers to build more successful and responsible businesses”.