The Treasury has confirmed plans to remove the exemption from customs duties for consignments valued under £135, with implementation signalled for 2029. The British Chambers of Commerce has responded, noting both competitive effects for retailers and wider strategic reforms the UK should pursue.
The change would bring low value goods into scope for customs duty. The policy is intended to align the UK with steps taken by the United States, and those due in the European Union at the start of January. Treasury estimates suggest that almost £6bn of currently duty-free imports would be covered, raising at least £500m a year for the Exchequer.
William Bain, Head of Trade Policy at the British Chambers of Commerce, said:
This has been on the cards for a while as the US has already made this change and the EU will do so at the start of January. If the UK did not follow suit, then it would risk significant trade diversion of goods from China as they would become more expensive to sell in those other markets.” He added: “There will be winners and losers from this move. Many High St and online retailers have complained about unfair competition from Chinese manufacturers which can significantly undercut them.
On the fiscal and logistics effects, Bain noted: “The Treasury estimates that almost £6bn of goods that currently enter the UK without having to pay customs duties would be covered by this change. That would raise at least an extra £500m for the Exchequer every year. On the losing side are regional airports, which have been major beneficiaries of the surge in freight flights carrying these goods from China.”
Setting the direction of travel, the BCC view is clear: “In making these changes from 2029 it is important the Government keeps a level playing field with the EU and US to maintain our strong trade ties. The UK needs a modernised rulebook, the rollout of digital trade corridors, a clear timeline for a Single Trade Window, and better customs co-operation with the US and EU. These changes on customs duty charges should be part of that, so all businesses benefit from lower costs and greater efficiency in trade.”
TVCC aligns with the BCC position that any extension of customs duty to low value consignments must sit within a wider, practical reform programme that keeps the UK aligned with the EU and US. A level playing field matters for our retailers and manufacturers, and clear plans matter for operators moving parcels through Heathrow and regional airports.
The UK should press ahead with a modernised rulebook, better customs co-operation with key partners, and firm timelines for the Single Trade Window. Digital trade corridors should be expanded so compliant firms can move goods with fewer interventions and lower costs.
Read the full BCC article here
