Value of Small Parcels from China to UK Surges to £3bn Amid Retailer Concerns
The value of small parcels shipped from China to the UK more than doubled in the past year, sparking concerns among British retailers about unfair competition and lost tax revenues.
Figures obtained by the BBC from HM Revenue & Customs (HMRC) show the value of such low-value imports – goods priced at £135 or less and exempt from customs duties – jumped from £1.3bn in 2023-24 to about £3bn in the latest financial year.
Parcels from China made up 51% of all small packages entering the UK, up sharply from 35% the previous year. The surge is linked to the rapid growth of e-commerce platforms Shein and Temu, which have drawn millions of British shoppers with cheap fashion, household goods, and electronics.
UK-based wholesalers and retailers say they are being squeezed out. “It’s affecting our customers as well. They’re not ordering from us because they know their customers can get it cheaper online,” said Katerina Buchy, director of Sheffield giftware company Ancient Wisdom. She called on the government to tighten the rules, warning that firms like hers pay taxes and employ staff while overseas sellers exploit exemptions.
The Treasury launched a review of the system in April following lobbying from high street retailers such as Next and Sainsbury’s. Andrew Opie of the British Retail Consortium (BRC) described low-value imports as “a significant and growing threat” to UK businesses, adding that such parcels often bypass proper customs checks, exposing consumers to potentially unsafe goods.
Analysts caution that any changes could have unintended consequences. Retail expert Natalie Berg said removing the exemption would close a loophole but might raise costs for low-income households and small importers.
Both Shein and Temu defended their business models. Temu said it aimed to have half of its UK sellers based domestically by the end of the year, while Shein stressed its vendors must follow a strict code of conduct and safety standards.
Other markets are already moving. The United States has ended its tax exemption for low-cost Chinese imports, while the European Union will soon impose a €2 fee on small parcels worth €150 or less.
In the UK, Chancellor Rachel Reeves’ review of low-value imports is ongoing. A Treasury spokesperson said the government remained committed to supporting high streets, lowering business rates and maintaining the lowest corporation tax in the G7.
