UK Delays Import Duty Reforms for Small Parcels, Sparking Retailer Backlash

The UK government has delayed the implementation of import duty reforms for small parcels below £135 until October 2028, pushing back the original 2029 deadline by six months. The decision, announced by the Treasury on Tuesday, has drawn criticism from high street retailers who argue it perpetuates an unfair advantage for online giants like Shein and Temu, according to a statement from the Department for Business and Trade.

The move comes as the UK faces mounting pressure to address the surge in low-value imports, which have tripled to 1.6 million daily deliveries since 2021, according to a government report. The Treasury said the revised timeline “targets cheap imports and puts Britain’s high streets first,” with Treasury minister Dan Tomlinson stating the policy “tackles the unfair competition and dodgy businesses that are doing real damage to our high streets.”

Why is the Delay Controversial?

Retailers including Marks & Spencer, Primark, and Next have long argued that the current system allows foreign online sellers to bypass local taxes and safety checks, undermining domestic businesses. Helen Dickinson, CEO of the British Retail Consortium (BRC), criticized the delay as “unacceptable,” saying “UK retailers cannot afford to compete on an unfair playing field against importers not paying tariffs.”

The Treasury rejected calls for a temporary flat fee to counter “waves of imports,” a proposal backed by the Retail Industry Association. George Weston, CEO of Associated British Foods (which owns Primark), called the decision “dispiriting,” estimating the government is forgoing hundreds of millions in potential revenue. “If the government expects to be seen as serious about rejuvenating town and city centres, ministers must examine how this unacceptable timeline can be accelerated,” he said.

How Do EU Measures Compare?

The EU has taken a stricter approach, imposing a €3-per-item duty on online purchases below €150 starting July 2024. The bloc also plans a full overhaul of its low-value import regime by 2028, according to the European Commission. In contrast, the UK’s revised timeline leaves retailers in limbo, with Chancellor Rachel Reeves’ 2023 Budget committing to a “detailed framework” by 2029.

Online retailers, including Shein and Temu, have defended their practices, arguing that direct-to-consumer models keep inflation low. “Selling directly to consumers keeps prices competitive,” a spokesperson for Shein said. Both companies denied intentionally selling unsafe products, citing enhanced quality controls.

What’s Next for UK Retailers?

The delayed reforms have intensified debates over the UK’s ability to balance consumer demand with support for domestic businesses. With 1.6 million low-value parcels arriving daily, the Treasury faces pressure to align its policies with the EU’s stricter measures.

“This is a critical moment for UK retail,” said Richard Lim, an economist at the Centre for Economics and Business Research. “Without urgent action, the high street risks further decline as consumers shift to unregulated online platforms.”

The government has not commented on calls to accelerate the 2028 deadline, leaving retailers to navigate an increasingly polarized landscape. As the debate intensifies, the outcome could shape the future of commerce in the UK and beyond.