Retailers are urging the Government to take swifter action in closing a loophole related to import taxes on small packages. Under the current “de minimis” rule, overseas retailers can ship parcels valued at less than £135 to the UK without paying import duties. This practice has been criticized by high street businesses, claiming it gives unfair advantages to companies like Shein and Temu, known for importing inexpensive goods from China.
The Chancellor, Rachel Reeves, initially planned to eliminate this loophole by 2029. However, the Treasury recently announced that the reforms will be expedited to October 2028 following consultations with industry stakeholders, aiming to promote fair competition between brick-and-mortar stores and online retailers.
Despite this adjustment, retailers find the revised timeline still unsatisfactory and are pressing for an even earlier implementation. The US has already closed this loophole, and the European Union recently adopted similar measures.
Starting July 2026, the EU will enforce a temporary €3 customs duty per item on low-value goods up to €150 until July 2028, when regular customs duties will apply. George Weston, the chief executive of ABF, Primark’s parent company, expressed disappointment at the delayed action, highlighting the detrimental impact on UK high streets and potential revenue loss for the government.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), emphasized that UK retailers cannot compete on an uneven playing field against tariff-exempt importers. Alongside the import tax reforms, the government initiated a review of VAT collection for businesses operating through online marketplaces.
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