The UK Treasury has announced it will bring forward the closure of the 'de minimis' tax loophole to October 2028, a year earlier than previously planned. The rule currently allows overseas retailers to send small parcels worth less than £135 to the UK without paying import duties.
Retailers Criticise Timeline as 'Unacceptable'
High street businesses argue that the loophole unfairly benefits Chinese-owned companies like Shein and Temu, which import cheap goods. Chancellor Rachel Reeves had originally set the closure for 2029, but after consultations with industry, the Treasury accelerated the reforms. However, retailers say the new timeline is still not fast enough.
George Weston, chief executive of Primark parent group ABF, said: “This is so dispiriting. A system that the government itself recognises damages UK high streets and loses the exchequer hundreds of millions in potential revenue is being left in place for two more years. If the government expects to be seen as serious about rejuvenating town and city centres and preserving UK jobs, then ministers must examine how this unacceptable timeline can be accelerated and show more support for UK retail.”
International Comparisons
The US ended its 'de minimis' loophole last year, and the European Union is set to follow suit. From July 2026, the EU will apply a temporary €3 customs duty per item on low-value goods up to €150, lasting until July 2028, after which normal customs duties will apply.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “While the Government has rightly recognised that a three-year timeline for implementing low-value import reforms is too long, bringing it forward by just six months does not go far enough. UK retailers cannot afford to compete on an unfair playing field against importers not paying tariffs.”
Broader Tax Policy Updates
The move was part of a range of tax policy updates, which also included a government review of how VAT is collected for businesses trading through online marketplaces. The Treasury stated that the changes “ensure fairer competition between high street and online retailers”.
