Chinese export data shows $1.8 billion of cheap parcels entered the UK between December and April, the sixth‑most globally and more than France and Germany combined. The flow dwarfs rivals and erodes margins for domestic chains. Large retailers such as Primark and Marks & Spencer are urging ministers to close a customs‑duty exemption that lets low‑value imports enter tax‑free.

Retailers argue the 2029 deadline in Chancellor Rachel Reeves’s budget is too late. A flat fee of £2.60 per parcel would generate about £1.7 billion annually, according to a letter signed by eighteen firms including M&S and Next. Primark CEO George Weston says the loophole disadvantages UK employers and fuels growth for fast‑fashion platforms such as Shein and Temu.

The Treasury says it will strip the de minimis relief and overhaul declaration rules, aligning the UK with France’s €2 tax and the EU’s upcoming €3 duty on parcels under €150. Ministers have not yet responded to the March 6 consultation, leaving domestic retailers waiting while overseas sellers profit. The dispute now centres on revenue loss and competitive fairness. It also pressures the fiscal outlook.