Chancellor delays axing of de minimis rule until 2029

The de minimis rule in the UK means international retailers do not have to pay import duties on shipments worth under £135, but parcels above this figure can see customs levies of up to 25%.

Many UK retailers have criticised the tax loophole that benefits Chinese ecommerce players such as Shein and Temu, as the rapid growth in such imports is affecting the high street and UK growth.

The Treasury confirmed the de minimis rule will be scrapped after a review, but the changes are unlikely to come in until March 2029, according to The Times.

The government expects the reforms to bring in £500m a year and said the money would be reinvested in public businesses.

In the US, President Trump scrapped the country’s own tax exemption for small packages valued under $800, which caused chaos at delivery ports.

Reeves is planning to launch a consultation on how to create and implement the new arrangements for low-value imports.

She has decided to gradually phase out the de minimis rule rather than scrap it immediately after concerns were raised that borders could be clogged up, causing havoc for other businesses.

Reeves has decided to phase out the exemption gradually rather than immediately amid concerns that scrapping it straightaway could clog up borders and create chaos for brands and logistics providers.

Bosses at Associated British Foods, B&Q and the British Retail Consortium (BRC) welcomed the news, but it is disappointing for many in the industry that hoped for a quicker change.

BRC chief executive Helen Dickinson 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.”