Britain accelerates plan to end low-value parcel tariff loophole (updated)

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Tue 15:46

Adds detail in paragraphs 3, 5, retail industry response in paragraphs 8-9
Tax loophole benefits online players like Shein
Last year UK said it would scrap loophole by March 2029
Has brought forward timeline to October 2028
Retail lobby group says move 'does not go far enough'

    LONDON, June 23 (Reuters) - Britain will scrap customs duty relief on low-value imports from October 2028, six months earlier than planned, the finance ministry said on Tuesday, targeting a tax loophole that benefits online retailers such as China's Shein.
UK retailers have been squeezed by rapidly growing ultra-low-cost platforms like Shein, Temu, AliExpress and more recently Amazon Haul, which send packages directly from factories in China to shoppers' doorsteps, benefiting from a customs waiver on parcels worth up to £135 ($178). 
Last November, the UK government said it would scrap the relief, meaning goods valued at £135 or less would be subject to customs import duties.
     
UK GOVERNMENT SAYS IT LISTENED TO INDUSTRY
However, the government's timeline of March 2029 "at the latest" was criticised by UK retailers as too slow. They said it risked making the UK an international outlier.
Last month, 16 major retailers, including Marks & Spencer MKS.L, Next NXT.L and Primark ABF.L, called for urgent action.
"The government has since listened to industry and chosen to accelerate delivery of the reforms by six months to October 2028," the finance ministry said.
It said the changes will ensure fairer competition between high street and online retailers.
However, the British Retail Consortium, which represents the major UK retailers, said bringing the timetable forward by six months "does not go far enough."
"While we recognise the practical challenges involved, we are keen to work with Government to explore solutions that could enable the changes to be introduced sooner," BRC CEO Helen Dickinson said.
The finance ministry also said it was reviewing how Value Added Tax is collected for businesses trading through online marketplaces.
     
($1 = 0.7574 pounds)

(Reporting by James Davey, editing by Sam Tabahriti, Alexandra Hudson)
((james.davey@thomsonreuters.com))