Temu’s UK business has been accused of avoiding corporation tax in the UK for two years despite “enormous” revenues.

A Companies House filing for the retailer’s UK registered business Whaleco found that Temu reported pre-tax profit of £2.88m in the year to 31 December, while sales doubled to £46.6m, Retail Week reported.  

Despite this, the Fair Tax Foundation claimed that Temu moved over £553.27m of UK revenues through its holding company Whaleco Technology in Ireland last year, before shifting the sales on again via Singapore tax havens and the Cayman Islands.

Fair Tax Foundation CEO Paul Monaghan said: “Serious questions need to be asked as to why Temu has such a negligible economic and tax footprint in the UK despite its enormous sales.

“There’s now been two years without corporation tax being paid on trading activities. The registered office in London is essentially a shell, with no staff and no long-term assets.

“It looks like UK customer activity is instead being shunted to Ireland and from there to Singapore, where the corporation tax paid on US$1.8bn (£1.33bn) of revenue is just US$1.7m (£1.25m), or less than 0.1%.”

Monaghan said that Temu’s ultimate parent company PDD Holdings was “listed on the United States’ Nasfaq” and had a “market worth of $188.3bn (£138.9bn)” but resided in the Cayman Islands”.

He thought that much of Temu’s true UK sales would be recorded on the retailer’s Irish registered business, which is forecast to report its figures in October.

Monaghan added: “The only tax Temu has paid in the UK is a bit of interest on the money they’ve decided to park here because they’re getting a good interest rate.

“They’re not paying any corporation tax whatsoever on their trading activities in the UK.”

Denying the allegations, a Temu spokesman said: “The Fair Tax Foundation analysis significantly underestimates the taxes Temu pays in the UK, as it does not take into account customs duties, VAT, and other levies.

“In 2024 alone, Temu paid hundreds of millions of pounds in UK taxes, and this figure will rise even further in 2025. We believe this number is already significantly bigger than many of our peers.”

“However, Temu is still a new entrant to the UK market, with low profit margins as we reinvest heavily in the UK and pass savings on to consumers.”

He continued: “As our business matures, we expect profit margins to improve and our (corporate) income tax payments to increase.

“What will remain constant is our focus on making quality products affordable and accessible to UK consumers. Our commitment is long-term, and we’re confident people will see that through our actions.”

In April, Temu warned its US shoppers to brace for higher prices following the implementation of tariffs on China.

The ecommerce giant called on customers to shop before the higher prices were implemented.

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