For a group of British retail heavyweights, the government’s move to close a tax loophole on low-value goods from overseas by 2029 would come too little, too late.
In a letter sent Friday, 16 household names, including Asos, Primark, Marks & Spencer and Next, urged Prime Minister Keir Starmer and finance minister Rachel Reeves to impose a 2.60-pound ($3.49) fee on small packages valued at less than 135 pounds ($181), mirroring a temporary European Union levy that begins in July.
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Waiving customs duties, they say, has given online marketplaces like Shein and Temu a competitive leg up, resulting in volumes of such goods tripling in the three years to 2024 to roughly 1.6 million a day.
Eliminating the so-called de minimis exception, by contrast, could add at least 1.7 million pounds ($2.3 million) to the United Kingdom’s public coffers.
“We urge you to accelerate the implementation of customs reform, with meaningful progress delivered by peak 2026 trading,” the letter said, first reported by Reuters. The problem of imports avoiding taxes and potentially skirting safety checks, it added, was “intensifying through 2026, not 2029,” with an “urgent need to act now.”
“Having taken the decision to do this to support U.K. retailers and high streets, the government must accelerate implementation or risk undermining the objective you aim to achieve,” the retailers added.
Beyond the EU, the letter cited action taken by the United States to eliminate its de minimis threshold in 2025, after President Trump said it was allowing fentanyl to be smuggled into the country while giving foreign businesses an unfair advantage over American ones.
Throughout 2024, U.S. Customs and Border Protection processed a record-breaking 1.4 billion de minimis packages, averaging nearly 4 million shipments a day. Up to half of these sub-$800 parcels originated from China, where Shein and Temu have the bulk of their manufacturing base.
“The U.S. acted last year, and we saw an immediate switch in overseas retailer focus into the U.K. and EU, exacerbating this structural disadvantage to U.K. retail,” the letter said. “The EU will act this July ahead of full reforms in 2028.”
By the time the EU makes permanent its 3-euro ($3.49) charge on formerly duty-free packages, the retailers said, overseas companies could be doubling down on Britain as a key entry point for cheap goods.
While the Starmer government had appeared enthusiastic about axing de minimis last year, it has since opted for a delayed timeline to allow businesses and border systems time to adjust.
But three years is too long to wait, the retailers said.
“We’re told the U.K. is becoming an outlier, with a growing share of LVI trade being directed into the market,” said the letter, using an acronym for low-value items. “This is not a future risk; it is already happening, evidenced by increased marketing spend targeting U.K. customers, LVI volumes tripling between 2021-2024, and more frequent product safety failures.”
