The value of small parcels being shipped from China to Britain using a controversial tax exemption more than doubled to £3billion in 2024, an investigation has revealed.
Data from HM Revenue & Customs seen by the BBC show the figures for 2024 dwarfed those of the previous financial year’s total of £1.3billion.
Online shopping giants, including Shein and Temu, have reportedly driven the upturn in sales of cheap goods sent from China to Britain using the heavily criticised tax exemption.
According to the data seen by the BBC, the value of the deliveries from China in 2024 comprised 51 per cent of all the small parcels shipped to Britain from around the world last year, rising from 35 per cent in 2023-24.
The data, supplied via a Freedom of Information request, revealed the sharp increase in small package imports just as politicians consider axing the tax exemption.
Earlier this year, Labour said it would review the current rules, which mean imports of packages valued at £135 or less avoid customs duties.
Surging: The value of small parcels being shipped from China to Britain using an under-fire tax exemption more than doubled to £3bn in 2024, an investigation has revealed.
Rachel Reeves announced the review in April amid concerns that the exemption was allowing Chinese e-commerce firms to undercut British high-street businesses, who face significant business rate tax payments.
Labour’s review of the customs treatment of low-value imports is ongoing and expected to be published ‘in due course’.
Top brass at Temu and Shein were questioned by MPs earlier this year over labour standards linked to the making of products sold on their platforms.
Currys boss Alex Baldock is among British retail bosses to have called for the duty exemption to be scrapped.
In the US, Donald Trump scrapped its ‘de minimis’ duty exemption on low-value packages, leading to reports that Chinese-based companies were ‘dumping’ products affected by the change and higher tariffs in Britain and other markets.
More than 30 per cent of all packages shipped to the US each day under the loophole were estimated to come from China, according to a 2023 Congressional committee report, with nearly half of all packages shipped under de minimis coming from the country.
In May, the EU said it would also introduce a charge on shipments which had previously received the tax exemption.
Katerina Buchy, director of Sheffield-based giftware wholesaler Ancient Wisdom, told the BBC: ‘I think the government should not allow these companies to export such high quantities of products under these rules because it’s just ridiculous.
‘I’d like to know how much they are losing in taxes. We pay taxes. We employ more than 100 people.’
Other British businesses, including those in the clothing sector, have spoken out against the customs exemption, claiming it makes it impossible to compete with large firms in China, namely Temu and Shein.
Andrew Opie, director of food and sustainability at the BRC, told the Daily Mail: ‘Low Value Imports pose a significant and growing threat to investment in UK High Streets as retailers, paying increased taxes since the budget and rising business rates face unfair competition.
‘Consumers are also exposed to unregulated, potentially unsafe products. We are pleased the Government has reviewed the “de minimis” rules but we need it to follow other countries and take action now. With the situation deteriorating, it is time for the Chancellor to act on her review.’
A spokesperson for Temu, said: ‘Temu brings together local and global sellers on one platform, and in the UK, we aim for half of all sales to be fulfilled through local sellers and warehouses by the end of this year. This approach helps consumers access affordable products while giving UK businesses a low-cost channel to reach new customers and grow.’
A spokesperson for Shein told the Daily Mail: ‘Shein operates a customer-driven, on-demand business model that allows us to be highly responsive to market demand while reducing overproduction and inventory waste and we pass the resulting cost savings on to our consumers.”
On product safety, the spokesperson added: ‘Shein vendors are required to comply with SHEIN’s code of conduct and stringent safety standards, and must also abide by the relevant laws and regulations of the markets where we operate.
‘To reinforce our commitment to safety, Shein is investing US$15 million this year alone in product safety and compliance initiatives, including 2.5million product safety and quality tests—a 25 per cent increase on last year.’
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