Solidarity Union welcomes the government’s review of the customs treatment of low-value imports—and urges bold, structural reform to protect UK jobs, retailers, and consumers.

The Problem: A Loophole Undermining UK Workers and Businesses

Under current UK rules, overseas sellers can ship goods valued at £135 or less directly to UK consumers without paying customs duties. This exemption—known as the de minimis threshold—was designed for convenience in a different era. Today, it functions as a subsidy for regulatory arbitrage, particularly for large platforms optimised to exploit it.

As Solidarity General Secretary Patrick Harrington wrote in our submission to HM Treasury:

“Our members see the day-to-day impacts of parcel-based arbitrage: cancelled production runs, shrinking shop margins, precarious courier work, and intensified cost pressures on households.”

UK manufacturers and retailers face compliance costs, VAT systems, and duties on inputs—while overseas sellers bypass these entirely. The result? A distorted market where British firms are forced to cut wages, standards, or investment just to stay afloat.

Sectoral Damage: From Garment Makers to Gig Couriers

The de minimis regime is not just a technical issue—it’s a frontline concern for workers across multiple sectors:

• Textiles and apparel: UK garment makers lose orders to ultra-cheap imports, leading to collapsed margins and the erosion of skilled jobs.
• Household goods and toys: SMEs producing small-format goods are undercut by duty-free micro-drops, often priced 10–20% below sustainable levels.
• Independent retailers: Compressed price ceilings force leaner inventories, reduced service hours, and staff cuts.
• Logistics and delivery: A torrent of ultra-low-margin parcels fuels casualised, gig-style delivery with unpredictable hours and pay.
• Border enforcement: Fragmented parcel flows hinder risk-based checks, making it harder to intercept unsafe, counterfeit, or forced-labour-linked goods.

The Government’s Review: A Welcome First Step

On 23 April 2025, Chancellor Rachel Reeves announced a formal review of the de minimis regime, acknowledging that:

“We must stand up for free and open trade… but fairness needs to be injected into the global economic system.”

Retail leaders echoed this sentiment. Theo Paphitis called the move “a much-needed injection of confidence,” while Currys CEO Alex Baldock warned:

“Low-value shipments delivered from abroad straight to UK consumers avoid import duty, often evade VAT, and can fail to meet safety standards.”

Solidarity agrees: the loophole must be closed, and enforcement modernised.

Solidarity’s Proposals for Reform

We urge HM Treasury and HMRC to adopt the following five-point plan:

1. Remove the Customs-Duty De Minimis for Direct-to-Consumer Parcels

• Abolish the exemption for parcels under £135 shipped directly from overseas sellers.
• Ensure trade remedies (anti-dumping, countervailing duties) apply regardless of consignment value.

2. Make Marketplaces the Importer of Record

• Require platforms to calculate and collect duty and VAT at checkout.
• Assign liability for data accuracy and compliance to the platform—not the micro-seller.

3. Mandate Advance Electronic Data for All Parcels

• Require HS codes, seller IDs, platform VAT/EORI, and recipient details pre-arrival.
• Use automated risk scoring to target safety, counterfeit, and forced-labour checks.

4. Introduce Anti-Avoidance Rules

• Aggregate same-day shipments to prevent artificial value-splitting.
• Exclude high-risk categories (e.g. trade remedies, sanctions, unsafe goods) from simplified regimes.

5. Phase Implementation with SME and Border Support

• Provide 6–12 months for platforms to deploy duty calculators and data pipelines.
• Offer sandbox tools and guidance for UK SMEs.
• Invest in border tech to keep compliant traffic flowing smoothly.

A Fairer Future for UK Trade

This is not a general tariff rise—it’s a targeted fix to restore fairness. As our submission notes:

“When everyone faces the same rules, price differences reflect efficiency and innovation—not regulatory arbitrage.”

With proper reform, we can:

• Stabilise manufacturing orders and retail margins.
• Reduce unsafe and counterfeit imports.
• Sustain quality jobs in logistics and production.
• Restore integrity to public revenue collection.

The UK can fix this loophole without clogging borders—by removing the de minimis exemption, assigning clear responsibility to platforms, and using modern data to keep trade flowing.

Let’s make trade fair again—for workers, for businesses, and for the communities they serve.