The UK government is exploring the possibility of ending the Low Value Import scheme, which currently allows online retailers to bring goods worth up to £135 into the country without paying customs duties.
This move comes as the UK braces for an influx of cheap imports, particularly from China, as a result of global trade shifts following the US-China trade war.
Chancellor Rachel Reeves announced a review of the scheme on Wednesday (23 April), responding to concerns raised by major UK retailers, including Next, Currys, and Sainsbury’s.
The retailers warned that an increase in low-cost Chinese imports could undercut UK businesses, threatening British high street stores.
“Retailers can see through the actions we have taken today around low-value imports that we are absolutely standing up for the British high street against the dumping of cheap imports of products that undercut British retailers,” Reeves said at the IMF and World Bank spring meetings in Washington.
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The UK government’s potential reform of the scheme would align the country with the US and the EU, both of which have signalled plans to close similar “de minimis” programs.
These programs allow tariff-free imports up to $800 in the US and €150 in the EU, but the US has announced that it will end this policy for parcels from China and Hong Kong starting May 2. The EU plans to phase out its own scheme by 2028.
As part of its strategy, the UK government is also introducing measures to safeguard against Chinese goods being diverted to Britain. These include enhanced monitoring of trade data to identify import surges and accelerated action from the Trade Remedies Authority (TRA), which is responsible for preventing unfair trade practices.
While major UK retailers have welcomed the review, small businesses have raised concerns about the potential impact on their exports.
Helen Dickinson, CEO of the British Retail Consortium which had lobbied for the review, argued that the policy was long overdue.
She told The Financial Times: “A review of this policy, which was designed to reduce the burden on low volume, low value imports, was already needed. With retailers seeing a rise in the number of potentially non-compliant products entering the UK market, it’s even more critical now.”
The government’s review of the scheme follows growing concerns about the impact of low-value imports on UK businesses.
Currys CEO Alex Baldock warned that Chinese products are already flooding the UK market, particularly through online platforms like Shein, Temu, and Amazon.
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