While the chancellor’s promise to review the UK’s de minimis rules was welcomed by retailers, could it be a double-edged sword for consumers?
Sometimes it’s hard to get retailers to agree on anything—much less on political policy and how to address the storm of headwinds the industry currently faces.
But that’s exactly what happened earlier this week, when chancellor Rachel Reeves announced plans to launch a consultation and review of the UK’s current ‘de minimis’ rules—which at present allow international retailers to send packages worth less than £135 to the UK without incurring import taxes.
While the move has been welcomed by retail, could changing or even closing the threshold lead to higher prices and lower consumer confidence, as well as heap further complexity on supply chains at the border?
‘A cancer to our retail landscape’
Theo Paphitis, owner of Ryman and Robert Dyas, led the chorus of acclaim for Reeves’ announcement. Speaking to the BBC this week, he described the ‘de minimis’ loophole as “a cancer to our retail landscape and our high streets”.
Paphitis joined the bosses of Sainsbury’s, Currys, Primark-owner ABF and the British Retail Consortium in welcoming the government’s consultation.
“All retailers selling to UK consumers should play by the same rules,” says Currys boss Alex Baldock. “If you want to sell to UK consumers, then abide by UK standards, and pay UK tax, just as UK retailers do.”
Baldock has also previously raised the prospect of overseas retailers—namely Chinese giants such as Shein and Temu—effectively “dumping” low-cost, low-quality goods into the UK market amidst the ongoing tariff and trade war between the US and China.
A new rival emerges
To that end, eyebrows have also been raised in UK retail over the last few weeks by the news that Chinese ecommerce giant JD.com was ramping up its plans to launch its Joybuy site—stocking branded ranges of ambient and frozen foods, household, health and pets products in the UK.
The retailer has also been advertising for more than 40 London-based category manager roles in the UK and recently hired former Lidl and Gorillas executive Matthew Nobbs as chief merchandise officer.
“The Joybuy/JD.com news is just another reason why the chancellor’s review is sorely needed,” said one retail source. “The last thing we need is another Chinese retailer coming in and trying to undercut us, with everything else going on.”
However, a source close to Joybuy and JD.com, refuted this characterisation of Joybuy as another low-cost, low-value international marketplace.
They said the Joybuy model is branded products, that at least a high percentage of products will be sourced in the UK, and that the model was direct to consumer, not a marketplace.
“JD.com has been developing its retail proposition for the UK and Europe over the last three years starting with the launch of Ochama in 2022,” they said.
“Like Ochama, Joybuy will be a local retailer locally sourcing as many quality and authentic products as possible. That’s better for customers and the market.”
Unintentionally inflationary?
While Reeves’ announcement generally won approval from larger retailers, some experts and smaller retailers have raised the prospect that a change might raise prices for consumers and add layers of bureaucracy for importers, logistics companies and businesses.
“With 16% of goods moved by small firms sitting below the £135 threshold, a decision to scrap it impacts on trading and inflation,” says Tina McKenzie, chair of the Federation of Small Businesses.
“It’s good that the government is launching a consultation and not just taking unilateral action like we’ve seen in the US,” one logistics source added. “Because there could be a lot of scope for knee-jerk reactions and uninformed decisions doing more harm than good for UK consumers and, by extension, retailers too”.
With President Trump’s sweeping tariffs and closure of the US’ own de minimis threshold, and a particular focus on Chinese and Hong Kong businesses, threatening to undermine consumer confidence and forced delivery giants such as DHL to stop importing such products into the US, inflation fears are rising.
However, Theo Paphitis believes it’s “absolute nonsense” that current de minimis thresholds keep inflation and prices down. Instead, he believes it only leads to jobs and tax revenues being lost from the UK, due to retailers being undercut by foreign rivals.
Whichever side is right, some experts believe that a similar complete closure of the UK de minimis rules could lead to similar issues here. For one thing, post-Brexit, UK imports are already ladened with red tape and the government has been slow to respond to and iron out issues.
For example, the third phase of post-Brexit border rules for imports from the European Union were only implemented in January 2025—more than four years after the UK left the bloc and nine years after the vote.
And no-one in the UK seems to know exactly how many parcels are currently entering into the country under the de minimis thresholds. Retail Week asked the Department for Business and Trade and the Treasury but received no response.
However, there are figures from the European Union, which might be at least indicative of how rapidly the volumes of such parcels coming into the UK have grown in recent years.
This data shows that in 2024, 91% of all ecommerce shipments valued up to €150 entering the EU came from China and their volume more than doubled between 2023 and 2024—from 1.9 billion to 4.17 billion items. This equates to roughly 10 such parcels per person, per year, into the EU.
While there’s scope for changes to possibly push up prices and cause chaos for supply chain and logistics firms, the devil will be in the detail. For now, at least, the move is still a hugely positive one for a UK retail sector badly in need of a win.
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