British high street retailers have warned that continued delays in closing a tax loophole on low-value imports could push more shops out of business and increase the risk of unsafe goods entering the UK market.
The concern centres on the £135 “de minimis” customs threshold, which allows overseas sellers to ship goods into the UK without paying customs duties if the value of each parcel falls below that limit. Retailers say the rule gives international e-commerce platforms a significant pricing advantage over domestic businesses that must pay VAT, duties and compliance costs on bulk imports.
Andrew Murphy, chief executive of toy retailer The Entertainer, said he was “gravely concerned” by the Government’s plan to delay scrapping the exemption until 2029. In a letter to ministers, he described the timetable as an “unacceptable delay” that prolongs an uneven competitive environment and places further pressure on already struggling UK retailers.
Murphy also warned that the UK risked becoming a destination for diverted online trade as other jurisdictions tighten rules. He pointed to the United States, which removed its own low-value exemption last year, and the European Union, which is preparing to introduce new duties on similar imports. The UK’s later timetable, he argued, could leave domestic markets exposed to redirected shipments.
The debate has intensified following regulatory scrutiny of major online platforms. Temu was recently fined €200 million by the European Commission over concerns that its marketplace allowed unsafe and illegal goods to be sold, including electrical items and children’s toys that failed safety standards. Temu has rejected the findings.
UK retailers including Sainsbury’s, Currys and AO World have also raised concerns that rapid growth in platforms such as Temu and Shein is distorting competition. The Government has confirmed that it will eventually remove the exemption, but not before 2029, citing the need to avoid disruption to customs systems.
Industry research has added to safety concerns. The British Toy and Hobby Association found that a large proportion of toys purchased from online marketplaces failed basic safety tests or labelling requirements, raising fears that substandard products are reaching UK households.
Geoff Sheffield of the Toy Retailer Association said unsafe imports were damaging consumer trust and undercutting legitimate retailers. He called for faster legislative action, warning that continued delays could lead to further store closures on the high street.
Helen Dickinson of the British Retail Consortium said the UK risked falling behind international peers, arguing that both the US and EU were moving more quickly to close similar loopholes.
A Treasury spokesperson said reforms were underway to ensure all imports are properly declared and controlled, adding that changes would help support fair competition and strengthen border safety.
