UK Finance Minister Rachel Reeves aims to collect roughly £500 million annually by removing the customs duty exemption for imported goods valued below £135, according to Reuters. The move follows pressure from major local retailers such as clothing chain Next and Associated British Foods, the owner of Primark, who have long complained about unfair competition from overseas online sellers.
Currently, while large companies pay customs duties for bulk imports, individual buyers can order similar products directly from foreign online retailers — often based in China — without paying duties, as long as the value of each item stays below the existing threshold.
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Reeves says it is time for UK stores to compete fairly with international sellers in order to support economic growth and jobs.
The Ministry of Finance stated that the removal of the exemption will be included in the November 26 budget, and authorities will launch a consultation on the new customs procedures. Officials added that the expected impact on consumer prices will be “modest.”
The measure mirrors similar actions abroad: US President Donald Trump removed the duty exemption for imports under $800 in August, and the European Union is preparing comparable rules for goods under €150.
George Weston, chief executive of ABF, welcomed the proposal, saying it closes a loophole that has disadvantaged UK businesses, harmed local shopping areas and allowed safety standards to be bypassed.
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