Following confirmation in last week’s Autumn Budget that the UK’s controversial de minimis rule – which exempts parcels worth under £135 from import duties – will remain in place until March 2029, British retailers are calling for action ahead of this deadline.
Many expected Reeves to follow the lead of the US and EU and announce in the Autumn Budget that the exemption would be scrapped. Instead, low-cost overseas sellers will continue to benefit for at least three more years, prolonging what UK retailers describe as an uneven playing field.
Imports under £135 surged by 53% last year, reaching nearly £6 billion, according to HMRC figures obtained by Sky. Helen Dickinson, CEO of the British Retail Consortium, said: “[Closing the tax loophole] cannot come soon enough. The volume of potentially non-compliant goods entering the UK is growing exponentially.”
Why the delay?
Logistics firms including Royal Mail, DHL Express and Evri warned that scrapping the rule abruptly could cause border disruption and increase costs. Treasury officials point to similar chaos in the US when its own low-value exemption was removed earlier this year, and note that the EU is phasing out its €150 threshold gradually, with full implementation due in 2028.
The government expects the eventual removal to raise £500m annually, earmarked for public services and business support. Reeves will launch a consultation on new customs arrangements within weeks, with detailed proposals expected next year.
Industry reaction
Some in the sector believe a phased approach is the right one. Deann Evans, managing director, EMEA at Shopify, said: “The Chancellor’s decision to keep the UK’s de minimis threshold until 2029 sends a clear message and puts undue pressure on British retailers. Making abrupt changes to de minimis could disproportionately harm SMBs. Given SMBs make up 99% of the UK’s business population, changes that impact them need to be introduced carefully. A phased approach gives them breathing space to prepare.”
However, others are clear that the government needs to take swifter action. The British Retail Consortium said in a statement: “While we welcome the decision… the proposed timeframe is simply too long.”
Leading the call for retailers to demand faster change, James Rigg, CEO of Trojan Group, said: “Scrapping the ‘de minimis’ loophole is absolutely the right call, and it should never have taken this long. For years now, overseas sellers have been able to ship low-value goods into the UK without paying the same taxes or meeting the same obligations that British retailers face every day.
“Waiting until March 2029 leaves overseas sellers with what is effectively a 20% tax discount for another three years. That’s simply not sustainable for UK businesses trying to grow, hire and invest.
“We’re urging the industry to come together. The consultation gives us a rare chance to speak with one voice and demand that these changes be brought in far sooner.”
With the consultation on the horizon, the next few months will be critical: will industry voices succeed in accelerating the timeline, or will the government hold firm on a phased approach? One thing is clear – the debate over de minimis is no longer just about customs; it’s about the future competitiveness of British retail.
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