UK urged to remove low value customs duty relief

Goods sold direct to UK consumers by overseas sellers avoid customs duty on import if the consignment value is less than £135, although VAT is due. Overseas sellers who take advantage of this relief include the fast fashion Chinese companies Shein and Temu.

The EU is removing a similar duty relief for goods below €150 in 2028; several UK retailers are concerned that the UK relief is benefiting overseas sellers at their expense.

The low value relief was envisaged to be used primarily by small independent overseas sellers not large corporations. The rate of customs duty for goods imported into the UK is typically between 2% and 6%, but clothing is higher at 12%. Some goods have a nil rate of duty in the UK Tariff. Goods imported into the UK, manufactured or grown in the EU have a nil rate of customs duty under the EU-UK trade deal.

To discuss this in further detail, please get in touch with one of our Indirect Tax Services team members.