Retailers are urging the Government to take swifter action in closing a loophole that allows overseas retailers to send small parcels valued under £135 to the UK without paying import duties. This loophole, known as the “de minimis” tax rule, has been criticized by high street businesses for providing unfair advantages to companies like Shein and Temu, which import inexpensive goods from China.
Initially planned for closure in 2029, the Treasury has now announced an accelerated timeline, moving the reforms to October 2028 following consultations with industry stakeholders. Despite the adjustment, retailers have expressed dissatisfaction with the proposed timeframe, insisting on an even earlier implementation.
The US has already closed the “de minimis” loophole, and the European Union recently followed suit. Starting from July 2026, the EU will impose a temporary €3 customs duty per item on low-value goods worth up to €150 until July 2028, after which standard customs duties will apply.
George Weston, chief executive of ABF, the parent group of Primark, criticized the delay in closing the loophole, stating that the current system harms UK high streets and results in significant revenue loss for the government. Helen Dickinson, chief executive of the British Retail Consortium (BRC), emphasized the urgency for a more expedited timeline, highlighting the challenges faced by UK retailers competing against tariff-free importers.
In addition to the import tax reforms, the government has initiated a review of VAT collection for businesses operating through online marketplaces as part of its wider tax policy updates.
