Finance
UK retailers urge government to end parcel tariff loophole sooner
Published by Global Banking and Finance Review
Posted on November 27, 2025
3 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 27, 2025
3 min readLast updated: January 20, 2026
UK retailers urge the government to end the parcel tariff loophole before 2029, as it affects local businesses competing with low-cost international platforms.
By Helen Reid and James Davey
LONDON (Reuters) -British retailers have welcomed the government's decision to start charging customs duties on low-value e-commerce parcels but said a March 2029 timeline is too late and risks making the country an international outlier.
UK retailers have been squeezed by rapidly growing ultra-low-cost platforms like AliExpress, Shein, Temu, and more recently Amazon Haul, which send packages directly from factories in China to shoppers' doorsteps, benefiting from a customs waiver on parcels worth less than 135 pounds ($179).
"I will stop overseas online firms from undercutting our high street" by applying customs duty on parcels of any value, Reeves told parliament in her budget speech on Wednesday.
TIME FRAME IS 'SIMPLY TOO LONG'
But the finance ministry said the change would be made in March 2029 "at the latest", with a consultation on the policy to run until March next year.
Helen Dickinson, chief executive of the British Retail Consortium trade body, said the proposed time frame is "simply too long", citing government figures that 1.6 million parcels are taking advantage of the exemption every day, twice as many as last year.
"Businesses cannot afford any delay," she said.
The United States, the biggest market for Shein and Temu, has already ended its customs waiver, dubbed "de minimis", on parcels worth less than $800, scrapping it for imports from China and Hong Kong in May before removing it across the board in August.
The U.S. initially tried to remove the waiver in February with just 48 hours' notice, but was forced to row back after more than a million packages piled up at New York's John F. Kennedy International Airport.
The 2029 timeline also puts Britain well behind the European Union, which two weeks ago brought forward a plan to scrap its equivalent customs waiver, on packages under 150 euros, to 2026 from 2028.
Last year South Africa began charging value added tax on low-value parcels, while Brazil introduced a 20% tax on international purchases of up to $50.
CLOSING THE GAP WITH HIGH STREET
Removing de minimis adds to costs for online retailers sending direct to consumers, denting their competitiveness compared to traditional retailers who pay duties on products imported in bulk.
"The gap between online and high street prices will shrink, potentially encouraging shoppers to return to UK retailers," said Andrew Thurston, customs duty senior manager at accountancy firm MHA.
Dan Finley, CEO of Debenhams Group, which owns online fast-fashion retailer Boohoo, said delaying implementation until 2029 "means lost revenue for the UK and continued unfairness in the market."
Boohoo sales have declined significantly as Shein has grown.
Sainsbury's, owner of Argos which offers an array of products similar to Amazon and Temu, also said it was disappointed by the proposed timeline and there is a risk the UK becomes an international outlier.
($1 = 0.7557 pounds)
(Reporting by Helen Reid and James Davey; Editing by Conor Humphrie)
E-commerce refers to buying and selling goods or services using the internet. It includes online shopping, electronic payments, and online marketplaces.
A customs waiver is an exemption from paying customs duties on certain goods, typically for low-value items, to facilitate trade and reduce costs for consumers.
The UK economy is the economic system of the United Kingdom, characterized by a mix of private and public enterprise, and is one of the largest economies in the world.
Retail trade involves the sale of goods and services to consumers. It encompasses various businesses, from small shops to large department stores.
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