Retailers are urging the Government to take swifter action in closing a loophole that allows overseas retailers to avoid import taxes on small packages under the “de minimis” rule for parcels valued below £135 entering the UK. This rule has been pointed out to favor companies like Shein and Temu, known for importing low-cost goods from China.
Originally planned for closure in 2029, the Treasury has now announced an earlier implementation date of October 2028 following industry consultations to promote fair competition between traditional and online retailers. Despite this advancement, retailers find the revised timeline unsatisfactory and are demanding an even earlier enforcement.
The US discontinued the “de minimis” loophole last year, while the European Union recently followed suit. Starting July 2026, the EU will impose a temporary €3 customs duty per item on low-value goods up to €150 until July 2028, after which regular customs duties will be enforced.
George Weston, the chief executive of ABF, expressed disappointment at the prolonged existence of a system recognized to harm UK high streets and lead to substantial revenue loss for the government. He emphasized the necessity for accelerated action to support UK retail and revitalize town centers.
Helen Dickinson, CEO of the British Retail Consortium (BRC), echoed concerns over the slow progress, stating that UK retailers cannot compete fairly against tariff-free importers. The closure of the loophole is part of broader tax policy updates, including a review of VAT collection for businesses trading through online platforms.