Thu, 24 Apr 2025

Thu, 24 Apr 2025 Tax-free parcels rule used by Shein and Temu under review

Retailers argue that cheap foreign rivals are undercutting business using a tax-free status on small parcels.

* Major retailers, including Theo Paphitis and Sainsbury's, have welcomed the government's review of a rule that allows small parcels worth less than £135 to enter the UK duty-free.
* The rule is seen as unfair because it gives overseas firms such as Shein and Temu an advantage over British businesses.
* Retailers argue that they are being undercut by overseas rivals who take advantage of the duty-free threshold, leading to a loss of jobs and tax revenue for the UK.
* Scrapping the exemption could raise costs for small businesses and lead to price rises for customers, according to the Federation of Small Businesses.
* The review is also seen as necessary because the "de minimis" rule has been exploited by Chinese retailers who are shipping large quantities of goods worth less than £135 into the UK.
* The US has scrapped a similar measure, and its president Donald Trump has imposed tariffs on Chinese goods, leading to concerns that China will dump goods in the UK to avoid the tariffs.
* Retailers such as Currys have said that they are pleased with the government's review and want it to level the playing field between British and overseas retailers.
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