Chancellor Rachel Reeves has launched a review of the UK’s low-value import tax rules amid growing concerns that Chinese retailers are flooding the market with cheap goods, undermining British businesses.
The current system permits goods valued at £135 or less to enter the UK free of customs duties. This exemption, originally intended to ease the burden on low-value imports, has been increasingly exploited by online giants such as Shein, Temu, and sellers on Amazon and AliExpress, who ship directly to British consumers.
Retailers including Sainsbury’s, Next, and Ryman have raised the alarm over what they describe as “unfair competition” from overseas sellers, prompting the Treasury to act.
Reeves, speaking in Washington, said the government is standing up for UK high streets and would not allow “dumping of cheap products” that undercut domestic retailers.
Mounting Pressure to Reform UK Import Rules
The move comes as other global economies clamp down on similar practices. The US is preparing to revoke its $800 “de minimis” exemption for parcels from China, while the EU has also announced plans to scrap its own duty-free threshold for low-value goods.
Retailers argue that the surge in these imports not only threatens UK competitiveness but also bypasses essential safety checks.
Will Jones, COO of the British Home Enhancement Trade Association (BHETA), estimates that 100 million such parcels entered the UK in 2023, with over 95% escaping product safety inspections.
In one case, 98% of untaxed iPhone chargers failed to meet UK safety standards.
Retail Industry Applauds the Government’s Move
Industry leaders have welcomed the review. Helen Dickinson, CEO of the British Retail Consortium, said the government had “listened to the concerns of retailers.”
Retail magnate Theo Paphitis called the initiative “a strong step in the right direction,” while Primark’s parent company said abolishing tax breaks for low-value imports would demonstrate solid support for British business.
BHETA has called for the duty-free threshold to be lowered to £40, citing safety concerns and economic fairness.
The review signals a shift in trade policy aimed at restoring balance for UK retailers, tackling regulatory loopholes, and ensuring imported goods meet the same standards as those made and sold in Britain.
