UK Retailers Demand Crackdown on Chinese Tax Loophole

[Social Media]

 

Major UK retailers are urging the government to take decisive action and close a tax loophole that allows Chinese e-commerce giants like Shein and Temu to avoid paying customs duties on small orders. The call follows a similar move by Donald Trump in the United States, where he pledged to eliminate the exemption that allows overseas businesses to ship small packages without incurring duties.

 

Leading figures in British retail, including those behind Ryman, Robert Dyas, Superdry, and Gieves & Hawkes, have criticized the current system for creating an unfair competitive advantage for foreign companies. Theo Paphitis, the owner of Boux Avenue, Robert Dyas, and Ryman, warned that allowing overseas businesses to continue benefiting from this loophole would be catastrophic for UK industry. “If you’re not paying import duties, not paying VAT and not paying national insurance to employees here then you’ve got an unfair advantage over everybody else,” he said. “It is not a level playing field.”

 

Julian Dunkerton, co-founder of Superdry, voiced his strong support for the UK government following Trump's approach. “Their trade with the UK should be treated as a single transaction and taxed accordingly,” he stated. The current UK policy, known as the de minimis rule, exempts shipments valued under £135 from customs duties, while packages exceeding this threshold can incur duties of up to 25 percent. In contrast, Trump has vowed to remove the same exemption in the U.S. for shipments valued under $800 from China, Canada, and Mexico.

 

Retail industry leaders have been advocating for stricter regulations on low-value imports for years, arguing that overseas retailers use the exemption to flood the market with cheap products, undercutting domestic businesses. Touker Suleyman, owner of Gieves & Hawkes, Ghost, and Finery, expressed frustration over the UK government’s inaction. “The UK government has not been listening to retail and they haven’t got the guts to take a decision. With all due respect to President Trump, he’s got the guts to say, ‘this is how it’s going to be’.”

 

Harold Tillman, former chairman of the British Fashion Council and former head of Jaeger and Aquascutum, agreed with the U.S. president’s stance. “I do agree with the American president,” he said, adding that such a move would create a fairer marketplace and potentially curb the excessive production of low-cost fashion items.

 

The decision by Trump could have significant consequences for Shein, particularly as the company is considering a £50 billion listing on the London Stock Exchange. The U.S. remains Shein’s most profitable market, and any policy shift could impact its revenue streams. While a London float could bring substantial investment to the UK economy, Paphitis believes the government must weigh the benefits of this listing against the ongoing loss of tax revenue and the negative impact on British high streets. “The government needs to think about the value of the float to the British economy compared to the billions the Treasury is losing out [in unpaid tax] and the demise of our own high streets,” he argued.

 

As pressure mounts, British retailers are calling for immediate action to ensure a fair and competitive market, preventing further damage to local businesses struggling to compete against tax-exempt overseas rivals.

 

Based on a report by The Times 2025-02-07

 

 

[ukrules]

Here in Thailand they made a change last year which apparently started charging taxes on anything worth 1 Baht or more apparently also aimed at China.

Do they still do that or did it quietly die in the night after China threatened to ban all of their weaponised tourists?

[JonnyF]

I doubt Starmer will want to upset his hero and inspiration, Xi. 

[Watawattana]

The retailers seem to have a valid point.

[Chomper Higgot]

How about a review of the tax loopholes being used by all corporations conducting online business in the UK?

 

No need to pick on the Chinese, deal with all of them in one go.

 

 

[John Drake]

9 hours ago, ukrules said:

Here in Thailand they made a change last year which apparently started charging taxes on anything worth 1 Baht or more apparently also aimed at China.

Do they still do that or did it quietly die in the night after China threatened to ban all of their weaponised tourists?

 

It is occurring. Last week I had Fedex deliver a used book (US$17) I ordered from South Africa. The fedex driver collected 52 baht on delivery and gave me a tax receipt. Used books I've ordered through ThaiPost, however, have not been imposing the tax.

[Bkk Brian]

6 hours ago, JonnyF said:

I doubt Starmer will want to upset his hero and inspiration, Xi. 

Exactly. He's just returned from China, meeting his hero

[The Old Bull]

The government did not stop collecting duty on low value items because they are nice guys. They stopped because at some point it costs more to collect than it's worth.