Temu's UK sales more than doubled to $171mn last year, driven by a tax loophole exempting small parcel imports from customs duty. The Chinese ecommerce giant reported a 171 per cent revenue increase in the year to December 2025, according to UK filings. Temu and rivals like Shein have capitalised on the duty exemption for parcels under £135, with over £3bn worth of customs-exempt packages shipped from China to the UK in 2024-25, up from £1.3bn the previous year.
The Treasury plans to close the exemption in 2028, but high street retailers argue this leaves them at a disadvantage for another two years. The EU introduced a temporary €3 duty on online items below €150 in July and will overhaul its low-value import regime from 2028. Temu earns revenue through transaction and marketing services for third-party merchants, primarily in China.
The company had 31 UK employees in 2025 and booked profits of $6mn, compared to no UK employees in 2024 despite $63mn in sales and $3mn in profits. Temu's UK entity paid $985,000 in corporation tax last year, with less than 2 per cent of PDD Holdings' corporation tax paid outside China, according to the Fair Tax Foundation. Paul Monaghan, chief executive of the Fair Tax Foundation, questioned why Temu has such a negligible economic and tax footprint despite enormous sales.
Temu did not immediately respond to a request for comment.
Source: Financial Times Companies · Summarized by HeadlinesBriefing