Monsoon boss Nick Stowe has urged the UK to follow in the footsteps of the US by removing the tax loopholes used by Chinese fast fashion giant Shein.
Over the past few days, US president Donald Trump has implemented tariffs on Chinese imports into the country, and scrapped “de mininis” exemptions which enabled products worth under $800 to be imported without paying certain taxes.
Small packages sent directly to US home addresses had previously been exempt from import taxes, which allowed businesses like Shein to avoid paying customs duties by shipping small, low-value orders directly to customers in the US.
The move has caused the US Postal Service to stop accepting parcels from Hong Kong and China until further notice.
Although the executive did not think the UK should bring in all the measures Trump has, he argued the government should address the tax loophole used by Shein.
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Just remove all tax loopholes full stop.
Retail giant Monsoon’s CEO calls on UK to scrap tax loopholes benefitting competition, so he can continue to exclusively use them himself
FTFY
The CEO, like all CEO’s is concerned with his own companies profit margin, noting else, but especially not “fairness”.
“My business model of exploiting low wage workers is under threat if people can do it themselves “
I’d like the government to go after billion pound companies who pay minimal tax like Starbucks, Amazon etc. If you make money off the British people you should pay taxes.
It’s astonishing we allow it to happen.
Starbucks, for example, contributes almost nothing to the UK (~4% effective tax rate), and they have a UK-based competitor, Costa, that doesn’t dodge taxes and pays an effective tax rate of over 20%.
Why the hell have our governments been allowing this to happen? Our businesses are playing at a massive disadvantage in their home market. It’s absurd.
I’m not saying I agree with this, but just to explain what is happening.
Companies pay tax on profits. The idea being that if I make metal widget that I sell for £1 then just flat taxing me at (for example) 20% would mean I owe 20p tax.
Now if I bought the metal from my widget from a Sunderland refinery, and they charged me 50p for the metal to make the widget then my £1 widget is actually only worth 50p, and that 20p tax starts looking fairly high. If I paid someone 30p to sell it for me then that 20p tax puts the widget down to worthless and I’ll not bother making it, depriving the taxman his 20p.
The plan therefore is to tax profits. After paying the refinery, my 50p profit is taxed at the 20% making it less likely that I’ll get in a position where I don’t make it, unless it really is unprofitable.
The issue with this is that if I owned the refinery as well then there’s nothing to stop me selling the metal at £1 so effective profits are £0, or negative with employee costs. Tax obligations £0. Now move the refinery to a tax haven, or sell at cost it to my “warehouse supplier” based in the Caymans who then sell it to the widget factory for the maximum amount means I’ve exported all my profits. The product doesn’t ever have to go near the Caymans.
This is what I understand Starbucks does, with their Swiss division selling the beans at outrageous prices to make the coffee shops a loss.
What’s the solution? I assume taxing takings but that could destroy small businesses who have been doing this correctly or business that runs on fine margins.
I don’t know why I never considered this.
I work for a German company and wondered why our internal prices were so high!
Trump postponed the removal of the de minimis exemption. I assume because someone managed to tell him it would cause a complete standstill at customs with how much paperwork it will cause. People were facing $35 paperwork charges on $1 packages. It would also cripple American R&D since it relies heavily on getting part samples from China, as does what’s left of British r&d
