Rachel Reeves is facing growing pressure to address a tax loophole that benefits foreign online retailers such as Shein and Temu.
High street retailers are urging the Government to remove the current rule that allows parcels valued at up to £135 to enter the UK without being subject to tax. Industry representatives argue that this creates an uneven playing field for domestic retailers who must comply with VAT and import duties.
The Chancellor has suggested that any changes to the policy may not take effect until March 2029. British Retail Consortium has warned that local retailers may struggle to remain competitive if the loophole continues.
Meanwhile, the European Union is planning to introduce a new fee on imports valued at €150 or less, highlighting a broader move across markets to tighten import tax rules.
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