Retailers are urging the Government to take more decisive action in closing a loophole that allows overseas retailers to send small parcels worth less than £135 to the UK without paying import duties. This loophole, known as the “de minimis” tax rule, has been criticized for giving unfair advantages to companies like Shein and Temu that import inexpensive goods from China.
Initially planned for closure in 2029, the Treasury has announced an accelerated timeline, with reforms now set to take effect in October 2028. While this move is seen as a step towards fairer competition between high street and online retailers, some industry experts argue that the new timeline is still unsatisfactory and are pushing for an even earlier implementation.
The US has already closed the “de minimis” loophole, and the European Union is scheduled to follow suit, imposing a temporary customs duty on low-value goods until July 2028. George Weston, chief executive of ABF, expressed disappointment in the delayed closure of the loophole, emphasizing the negative impact on UK high streets and potential revenue loss to the government.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), echoed concerns about the extended timeline, stating that UK retailers cannot compete effectively against importers who avoid paying tariffs. The government’s decision to bring forward the reforms was part of a broader tax policy update, which also included a review of VAT collection for businesses trading through online marketplaces.