The UK finance ministry announced on Friday that Finance Minister Rachel Reeves will remove the current tariff exemption for imported goods priced under £135, a move expected to generate around £500 million ($655 million) annually.
Reeves has promised not to increase living costs for UK households in the November 26 annual budget, but major retailers such as Next and Primark-owner Associated British Foods (ABF) have argued that the exemption gives an unfair advantage to overseas sellers—especially online platforms based in China.
Currently, large UK retailers pay tariffs on bulk imports, while individual consumers ordering low-cost items directly from abroad do not. Reeves said the change is meant to ensure “fair competition” and support local businesses.
The new tariff rules will be accompanied by a public consultation on implementation. The finance ministry stated that any increase in consumer prices will be “modest.”
The move mirrors actions taken by the United States, where former President Donald Trump removed tariff exemptions for imports under $800, and aligns with upcoming EU measures targeting imports under €150.
ABF CEO George Weston welcomed the decision, calling it a necessary step to close a loophole harming UK businesses and high streets.
UK Consumers Expect Higher Taxes
Ahead of the budget, UK consumers are anticipating potential tax increases following Reeves’ recent warning of “shared pain” in the coming years. According to the CEO of Marks & Spencer, this sentiment may dampen Christmas season spending, a critical period for the retail sector.
