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British retailers including Primark, Currys and Boohoo have criticised the government for waiting until 2029 to end a tax break on low value imported goods which has allowed them to be undercut by the likes of Shein and Temu.
The British Retail Consortium, which represents all the major retailers, said there were now 1.6m parcels arriving in the UK every day, double the number from last year, and “businesses cannot afford any delay on scrapping the existing rules”.
The so-called “de minimis” rule allows overseas sellers to send goods valued at £135 or less direct to British shoppers without paying any customs duty and has been criticised for “killing the high street”.
Fears about China’s retailers and manufacturers dumping goods in the UK have grown since the US in May revoked its own de minimis exception for Chinese-made goods. Under that exemption, parcels with a value of less than $800 (£600) shipped to individuals had been exempt from import tax. In August the US scrapped the tax break for items from all countries.
The EU said in February it would phase out its exemption on customs duties for low-value parcels.
Helen Dickinson, the chief executive of the trade body, added: “The US has already removed its threshold, with the EU following suit next year. The chancellor must take decisive action and remove the exemption as fast as possible. This will help protect British consumers from the risks of imported goods that don’t meet the UK’s stringent environmental and ethical standards, while promoting fairer competition.”
George Weston, the boss of Primark owner Associated British Foods, said the four-year delay, announced in Wednesday’s budget, “would prolong the damage caused and would be unacceptable”.
“A commitment to close the customs loophole on low value imports that unfairly disadvantages the high street is positive, but this needs to be brought in rapidly to prevent further undermining of UK retailers,” he said.
Dan Finley, the boss of Debenhams Group, the owner of Boohoo, Pretty Little Thing and several other online fashion brands, said it was “disappointing we have to wait more than three years.”
“There is no doubt that Shein and Temu are major competitors to us and they have disrupted our business and others’ in the recent years in the UK,” he said, adding bringing the change in sooner would mean “more money in the coffers of the Treasury and less burden on the UK taxpayer”.
He said the delay had “created an unlevel playing field” as British online sellers are losing the ability to sell low value goods to the US and EU without paying duty but their overseas competitors can continue to enjoy a similar tax break when they sell into the UK.
“They managed these changes in nine months in the US, I’m not sure why we can’t do it in the same amount of time,” he said.
Alex Baldock, the boss of electrical products retailer Currys urged the government to go “further and faster” on the de minimis and business rates changes. He said that plans for both were “a step in the right direction and we would urge the government to go further and faster on both”.
The proposed reforms are expected to boost the government’s coffers by about £500m a year, which it says will be reinvested into public services, supporting businesses and growing the economy.
Retail insiders said the government was holding off on blocking all low value imports because of fears of fuelling inflation. However, the government has said it expects any impact on consumer prices to “be modest”.
It said the change “seeks to keep the UK in line with partners and ensure the customs system is fair and fit for the realities of modern global trade”.
