Reeves 'to scrap customs duty exemption for low-value small packages'

Rachel Reeves is reportedly planning to close a tax loophole in her budget next month that allows overseas retailers including Shein and Temu to send small packages to the UK without paying customs duties.

- Joanna Partridge

High street chains say the arrangement, central to the business model of the online marketplaces where almost all sellers are based in China, creates an uneven playing field.

At present, parcels containing goods worth up to £135, known as "low-value imports", do not incur customs duty, while higher-value goods can incur a duty of up to 25%. Reeves will use her 26 November budget to close this loophole, which experts say costs the industry as much as £600m a year, according to a Financial Times report quoting unnamed government officials.

The chancellor said in April that she was reviewing the customs treatment of low-value imports, after similar moves by the US and the EU.