The rule currently exempts goods valued at £135 ($179.65) or less, including textiles, from customs duties upon entering the UK.
Several UK retailers maintain that these regulations give an edge to their international rivals.
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Addressing attendees at the IMF Spring meetings in Washington DC, Chancellor Rachel Reeves announced plans to re-evaluate the rule and emphasised the importance of an open global economy as a cornerstone of the UK’s Plan for Change, which prioritises growth.
Reeves stated: “We must stand up for free and open trade – crucial to deliver our Plan for Change to make everyone better off. We must help businesses keep their access to trade around the world. This government is meeting the moment to protect fair and open trade. Following recent announcements reducing tariffs and support for the zero-emissions vehicles industry, today’s package will help businesses compete fairly with international exporters, supporting a world economy that provides stability and fairness for working people and businesses alike.”
The government’s initiative aims to level the playing field by preventing Chinese firms from flooding online marketplaces with low-cost items, which undermines British retailers.
This follows calls from UK businesses and trade associations to eliminate the unfair advantage enjoyed by large international marketplaces such as Shein and Temu.
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By GlobalDataBusiness and Trade Secretary Jonathan Reynolds added: “This government won’t stand idly by while cheap imports flood our markets and harm British industries. That is why I met with the TRA recently to agree urgent steps to tackle these issues in real time to deliver quicker protections for firms.
“This is about standing up for our national interest, and as part of our Plan for Change, creating a level playing field where UK businesses can thrive and grow.”
Welcoming the review, British Retail Consortium (BRC) chief executive Helen Dickinson said: “The announcement of the review into the de minimis rules is most welcome and shows that the government has listened to the concerns and representations of retailers and the BRC and that it is prepared to take swift action to protect consumers from goods being dumped in the UK, many of which fail to meet UK environmental and ethical standards, as a result of global trade turmoil.
“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 de minimis rule distort competition, harms local suppliers, leads to job losses, and contributes to declining High Streets, according to the British Home Enhancement Trade Association (BHETA).
The trade body points out that while domestic businesses pay VAT and duties on imports, overseas sellers can bypass these costs on smaller parcels, allowing them to offer significantly lower prices often without meeting UK standards for safety, environment, or ethics.
BHETA marketing director Steve Richardson said: “The current consultation is a positive sign that the government is listening to domestic suppliers, and we are committed to ensuring that our members’ voices are heard throughout the process.
“We acknowledge that some small businesses currently benefit from the threshold, but believe any transition away from the de minimis rule should be managed carefully to support genuine UK SMEs—not enable large-scale exploitation by global online platforms”.
George Weston, Chief Executive of Associated British Foods, which owns Primark, said: “We welcome the Chancellor’s plan to review the customs treatment of Low Value Imports. The abolition of the favourable tax treatment of low value imports would be a significant step forwards in the government’s support for British businesses. We have long advocated for the closure of this tax loophole which undermines many UK companies that make a substantial contribution to the British economy, to the British high street and to the British Government’s own revenues.”
Earlier this month, US President Donald Trump announced the closure of the de minimis benefit, effective 2 May.
