A group of British retailers has urged ministers to follow Donald Trump’s lead in abolishing a tax loophole that allows Chinese ecommerce platforms such as Shein and Temu to avoid customs duties.
Prominent figures including Theo Paphitis, Julian Dunkerton, Touker Suleyman and Harold Tillman argue the current “de minimis” rule gives foreign companies an unfair edge.
In the US, President Trump has vowed to scrap a similar exemption that spares packages under $800 from import charges. The British threshold of £135 means Shein and Temu pay no customs duty on small shipments, a perk UK retailers say deprives the Treasury of vital revenue and undermines domestic businesses.
Theo Paphitis, owner of Boux Avenue, Ryman and Robert Dyas, warns continuing to let overseas firms skirt tax could be “suicide” for the UK retail sector. Julian Dunkerton, co-founder of Superdry, also believes Trump’s approach is the right step, while Touker Suleyman, owner of Gieves & Hawkes, praises the American president for “having the guts” to address the issue.
Shein is said to be considering a float on the London Stock Exchange worth up to £50 billion, a move that could boost UK markets and bring significant investment. However, Theo Paphitis counters that any benefit from such a listing could be overshadowed by the “billions” lost to HM Revenue & Customs and the strain on British high streets.
The Treasury maintains that the current regime aims to strike the right balance: although goods worth up to £135 from overseas do not attract customs duty, they still incur VAT at the same rate as domestic items. Yet many retailers, including Mark Ashton, founder of Little Mistress, believe the UK is “losing millions in tax revenue” that could be reinvested in the economy. They are calling for reforms to create a level playing field and to ensure domestic retailers remain competitive.
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UK retailers call on government to end China’s tax-free advantage