Key facts
- The value of small parcels shipped from China to the UK, exempt from import taxes, more than doubled to approximately £3 billion in the latest financial year.
- Chinese e-commerce giants Shein and Temu are major contributors to this increase.
- Low-value imports, valued at £135 or less, are currently exempt from customs duties.
- Parcels from China represented 51% of all small parcels shipped to the UK from around the world last year.
- UK retailers argue the exemption enables overseas companies to undercut them and poses a threat to investment in high streets.
- The UK government is reviewing the rules on low-value imports.
The value of small parcels shipped from China to the UK, exempt from import taxes, more than doubled to approximately £3 billion in the latest financial year, according to new figures. Chinese e-commerce giants such as Shein and Temu are understood to be major drivers of this increase, selling cheap goods to online shoppers.
Low-value imports, defined as packages worth £135 or less, are currently exempt from customs duties. Parcels from China constituted 51% of all small packages shipped to the UK from around the world last year, a significant increase from 35% in the previous financial year. These figures were obtained by the BBC via a Freedom of Information request to HM Revenue & Customs (HMRC).
UK retailers have expressed concerns that this exemption creates unfair competition, allowing overseas companies to undercut domestic businesses that face significant business rate tax payments. Andrew Opie, director of food and sustainability at the British Retail Consortium, stated that low-value imports pose a "significant and growing threat" to investment in UK High Streets and also expose consumers to potentially unsafe products.
In response to lobbying from retailers, the UK government announced in April that it would review the current rules. This follows similar actions by other major economies. In the US, President Donald Trump scrapped its "de minimis" duty exemption on low-value packages. The EU also announced in May that it would introduce a charge on shipments that previously benefited from tax exemption.
Retail analyst Natalie Berg noted that the rise in Chinese parcel imports coincides with the expansion of companies like Shein and Temu, which have rapidly become retail powerhouses. However, she cautioned that removing the tax exemption could disproportionately affect lower-income consumers and small firms that import goods.