Government pulls forward plan to close small parcel import tax loophole - but retailers are still unhappy

The government has brought forward plans to close a loophole on import taxes for small parcels – but major high street brands have said the timeframe is still "unacceptable".

Current tax rules mean overseas retailers can send packages worth less than £135, often called "de minimis" imports, to the UK without paying customs duties.

Companies such as Shein and Temu have become big players by manufacturing cheap products in China and then posting them directly to consumers, benefiting from the de minimis rules.

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Last year, the chancellor confirmed the UK would follow in the footsteps of the US and Europe by introducing reforms in 2029.

But on Tuesday, the Treasury said it will bring forward the removal of the customs duty relief to October 2028.

It said the change will ensure fairer competition between high street and online retailers.

While it's unclear exactly how much tax the move will generate, a Sky News investigation last year found the total declared trade value of de minimis imports into the UK in the fiscal year 2024-25 was £5.9bn.

An illustrative 20% tariff on those imports could raise more than £1bn.

Announcement 'does not go far enough'

While retailers have pushed for change, they say the new timeframe is still too long.

George Weston, chief executive of Primark parent group ABF, said: "This is so dispiriting.

"A system that the government itself recognises damages UK high streets and loses the exchequer hundreds of millions in potential revenue is being left in place for two more years."

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The British Retail Consortium - which represents major UK retailers including Next, Sainsbury's and Superdrug - added that the latest announcement "does not go for enough".

"While we recognise the practical challenges involved, we are keen to work with ⁠government to explore solutions that could enable ​the changes to be introduced sooner," its chief executive Helen Dickinson said.

(c) Sky News 2026: Government pulls forward plan to close small parcel import tax loophole - but retailer