Chancellor delays scrapping of 'de minimis' rule until 2029 as UK Budget looms
The Chancellor will not scrap the UK’s "de minimis" tax loophole - which allows overseas retailers to avoid import duties on parcels worth under £135 - until 2029, despite pressure from British businesses.
The exemption has been heavily criticised for giving foreign e-commerce giants such as Shein and Temu an unfair advantage.
Major UK firms, including Primark owner Associated British Foods, NEXT, and the British Retail Consortium (BRC), argue the rule distorts competition, undermines high streets, and deters investment.
Although the Treasury has confirmed the loophole will eventually be abolished, the delay may frustrate many in the sector.
Chancellor Rachel Reeves said the change - expected to raise £500 million a year once implemented - will help level the playing field for British shops. But she has opted for a phased approach to avoid overwhelming customs infrastructure, according to The Times
"I’m backing Britain’s high streets and the businesses that power them," said Reeves. "It’s time to make sure our local shops can compete fairly with overseas sellers and keep driving growth and good jobs across the UK."
Retail leaders say the reform "cannot come soon enough", warning that non-compliant goods entering the UK are soaring. Low-value imports from China to the UK more than doubled from £1.3 billion to £3 billion in 2024-25.
Internationally, the US and EU have already moved to end similar exemptions. President Trump scrapped America’s $800 threshold earlier this year, causing disruption at ports but pleasing domestic retailers.
Helen Dickinson, Chief Executive of the BRC, said: "It cannot come soon enough. The volume of potentially non-compliant goods entering the UK is growing exponentially and we encourage government to ensure this new policy is implemented as quickly as possible."
The decision comes as Reeves faces criticism from business groups ahead of the Budget. CBI Chief Rain Newton-Smith warned against "death by a thousand taxes", urging the Government to prioritise growth and avoid piling further costs onto firms.
