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. High street businesses argue that this practice unfairly advantages companies like Shein and Temu, known for importing low-cost goods from China.
Last year, Chancellor Rachel Reeves announced plans to address the loophole by 2029, but in a recent update, the Treasury has advanced the timeline to October 2028. This decision follows consultations with industry stakeholders to promote fair competition between traditional and online retailers.
Despite this adjustment, retailers find the new timeframe “unacceptable” and are pushing for an even earlier implementation. The US eliminated the loophole last year, and 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, which will transition to standard customs duties by July 2028.
George Weston, CEO of Primark’s parent company ABF, expressed disappointment, highlighting the detrimental impact on UK high streets and potential revenue losses for the government. He emphasized the need for expedited action to support the UK retail sector’s revival.
Helen Dickinson, CEO of the British Retail Consortium (BRC), echoed concerns, stating that a six-month acceleration of the reforms falls short of addressing the unfair competition faced by UK retailers against tariff-exempt importers.
The closure of the import tax loophole is part of a broader tax policy update that includes a review of VAT collection for businesses operating through online marketplaces.