SHEIN is facing allegations that it committed customs and VAT fraud when flying parcels over from China to UK customers.

The fast fashion retailer has been hit with a High Court lawsuit over claims of “manipulating customs declarations for VAT evasion,” according to a report by The Telegraph.

The claim was lodged last month by customs agent, IT Way Transgroup Clearance, alongside Orange Transgroup, which says it acted as an agent for SHEIN between 2021 and 2024.

Seeking damages of £5.8million the company claimed it worked with SHEIN “under pressure and reputational risk,” arguing the retailer had “misrepresented parcel responsibility.”

A spokesperson for SHEIN commented: “A local service provider is withholding repayment of monies to SHEIN. SHEIN has begun arbitration proceedings against the service provider.”

“The allegations that have been made against SHEIN are completely unfounded. SHEIN complies with all relevant laws and regulations in each market it operates in and will defend and pursue its legitimate interests rigorously.”

The Chinese fashion retailer has also faced criticisms over its use of a tax loophole in the UK that allows it to import products worth less than £135 without paying import duties. Chancellor Rachel Reeves has agreed to review the loophole following the U.S. and EU’s decision to end similar tax breaks.