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A surge in low-value imports is intensifying the debate over whether Britain should scrap its de minimis threshold, the £135 limit under which goods can currently enter the UK without duties.
According to newly released HMRC data, imports below that threshold soared by 53% in the year to April 2025, hitting a record £5.9 billion.
The US Decision
The UK’s de minimis dilemma
This growth has been fuelled by the US decision, under President Trump, to abolish its $800 (£600) de minimis allowance on parcels from China and Hong Kong.
With America closed off, many Chinese e-commerce platforms, including Shein and Temu, have aggressively pivoted to the UK.
Shein alone reported UK sales of £2 billion last year, up by a third, underscoring how quickly the online fast-fashion model is displacing traditional retail.
Damage Done?
Critics argue that Britain’s policy has left High Street shops dangerously exposed.
Parcelhero’s Head of Consumer Research, David Jinks, warns that the current framework has “effectively siphoned £5.9bn out of the UK economy and the tills of domestic retailers.”
Industry groups are now urging Chancellor Rachel Reeves to bring forward her review of the exemption, originally signalled for later this year, and align with international partners moving in the same direction.
The European Union has already committed to phasing out its €150 de minimis level in 2028, with Brussels considering a blanket fee of around €2 on all incoming parcels.
Analysts in the UK argue that delaying action until then would give Chinese sellers an unfair advantage and prolong the strain on domestic fashion and consumer goods producers.
Far From Clear-Cut
Yet the case for scrapping de minimis is far from clear-cut.
Imposing duties on low-value imports would raise costs for shoppers, particularly lower-income households who rely heavily on cheap online goods.
Small businesses, too, could be collateral damage: around 16% of goods moved by UK SMEs fall under the threshold, and many source their stock directly from Chinese manufacturers.
The Federation of Small Businesses has therefore urged caution, noting that sudden tariff hikes could raise costs and reduce competitiveness.
There are also practical concerns.
Customs checks on millions of additional parcels could slow down deliveries, add administrative complexity, and erode the cost-benefit case.
Historically, governments have maintained exemptions precisely because collecting tariffs on very low-value items risks costing more than the revenue gained.
Nonetheless, pressure is mounting.
Supporters of reform argue that maintaining the current rules simply accelerates the decline of the High Street, with legacy retailers unable to match the scale and pricing strategies of cross-border online platforms.
They point to recent high-profile failures, including Claire’s Accessories UK, as symptomatic of a retail ecosystem under siege.
As Chancellor Reeves prepares her Autumn Budget, the dilemma is stark: preserve affordability for consumers, or restore a level playing field for domestic retailers.
Either way, the UK’s de minimis debate is set to become a pivotal test of how trade policy intersects with retail survival in a digital, globalised economy.
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