Reeves to delay end of low-value import tax break until 2029

Britain will scrap the long-standing tax exemption on low-value imports in 2029, delaying a move sought by major retailers who say the current regime hands an advantage to fast-growing overseas platforms, The Times has reported.

It comes as the Treasury has confirmed it will abolish the “de minimis” rule – which removes import duties on parcels worth under £135 – but the change will not take effect for at least four years.

More than 1.6 million parcels enter the UK daily under the existing threshold, which allows overseas sellers, including Chinese operators such as Shein and Temu, to avoid duties that can reach 25% on higher-value goods. Retailers such as Currys and Next told the government’s review of the rules earlier this year that the system is hitting the high street and weighing on growth and jobs.

The government will launch a consultation on the design of the new customs arrangements in the coming months, with ministers preparing a phased approach amid concerns that an immediate change could disrupt border operations and logistics networks.

The delay means low-cost importers will continue to benefit from the exemption until at least March 2029. Sector leaders said the decision to scrap the rule was welcome, but argued that the timeline falls short of what many companies had hoped for.

Helen Dickinson, chief executive of the BRC, said: “It cannot come soon enough. The volume of potentially non-compliant goods entering the UK is growing exponentially and we encourage the government to ensure this new policy is implemented as quickly as possible.”

George Weston, chief executive of Associated British Foods, added: “This move closes a loophole that has disadvantaged British business, damaged British high streets and allowed proper safety standards to be ignored, and we hope it is implemented rapidly.”

The Treasury expects the reform to raise about £500m a year once in force, with the revenue earmarked for public services, business support and economic growth.

The move places the UK alongside the United States, where President Trump ended the country’s own exemption for packages worth under $800 (£611) this year, causing significant disruption at ports but attracting support from domestic retailers. 

The EU is also preparing to phase out its €150 (£132) threshold, with a temporary system from 2026 and full implementation by July 2028, while countries such as France and Germany plan tighter inspections and handling charges ahead of the bloc-wide change.