Retailers are urging the Government to take swifter action in closing a loophole that allows overseas retailers to send small packages valued under £135 to the UK without paying import taxes. This rule, known as the “de minimis” tax rule, has been criticized for providing an unfair advantage to companies like Shein and Temu, which import inexpensive goods from China.
Initially planned for closure in 2029, the Treasury announced a new timeline this week, moving up the reforms to October 2028 after consultations with industry stakeholders. Despite this adjustment, retailers are voicing concerns that the timeframe is still considered unacceptable and are pushing for an even earlier implementation.
The US already closed the “de minimis” loophole last year, and the European Union recently followed suit. The EU has introduced a temporary €3 customs duty per item on low-value goods up to €150 starting from July 2026 until July 2028, when standard customs duties will resume.
George Weston, the chief executive of ABF, the parent company of Primark, expressed disappointment with the delayed closure of the loophole, emphasizing the detrimental impact on UK high streets and potential revenue loss for the government. Industry leaders like Helen Dickinson, CEO of the British Retail Consortium (BRC), are calling for a faster pace in implementing the reforms to ensure fair competition for UK retailers.
The closure of the loophole is part of a broader tax policy update that includes a review of VAT collection for businesses trading through online marketplaces. Retailers are emphasizing the need for a level playing field to support UK retail and economic growth.
