Key facts
- The UK government will end the "de minimis" tax loophole for imports under £135 in October 2028.
- This deadline is six months earlier than previously scheduled.
- Retailers, including Primark and M&S, had lobbied for a faster end to the loophole.
- The loophole is seen as unfairly benefiting fast-fashion importers like Shein and Temu.
- The government will also review VAT collection from e-commerce firms.
UK ministers have announced that a tax loophole favouring low-value imports will be closed six months earlier than previously planned, moving the deadline to October 2028. The "de minimis" regime exempts imports under £135 from tax, a measure retailers argue unfairly benefits fast-fashion e-commerce giants like Shein and Temu.
Leading retailers, including Primark, M&S, and Next, had urged the government to accelerate the reforms, warning that the current system disadvantages high street businesses and potentially allows unsafe imports. While the government stated the earlier closure tackles unfair competition, retailers expressed frustration that the acceleration amounts to only six months, arguing that more immediate action is needed.
Helen Dickinson, chief executive of the British Retail Consortium, stated that while the government recognized the three-year timeline was too long, a six-month adjustment is insufficient. The BRC plans to continue lobbying for an earlier end to the loophole. Earlier this week, Primark and Monsoon Accessorize voiced concerns that the UK could become a "dumping ground" for low-value imports, especially as the EU prepares to implement its own clampdown on such imports in July.
In addition to closing the loophole, the government announced a review into how VAT is collected from e-commerce companies. Funds generated from this review are intended to support improvements to the business rates system, a move welcomed by the retail industry.