The UK’s decision to end the duty-free import of low-value goods in 2029 is expected to result in lower airfreight volumes coming into the country.
At the moment, goods valued at less than £135 can enter the UK without needing to pay any duties.
This loophole has been exploited by e-commerce platforms to bring goods into the country at a lower cost than traditional high-street retailers that pay duties on goods brought into the UK in bulk and stored in warehouses.
However, UK chancellor Rachel Reeves yesterday announced that the exemption would come to an end in March 2029 at the latest.
The move is seen as a delay, with many expecting the exemption to end much earlier.
However, the government said the extra time will allow it to launch on consultation on how to implement the change.
The move has been welcomed by traditional retailers and is expected to result in a rise in warehousing of goods in the UK and less airfreight.
Chris Clowes, executive director at global supply chain and logistics consultancy, SCALA, said: “While some ultra-low-cost imports – including those from major ecommerce platforms like Shein and Temu – may become more costly once the change eventually comes into force, the long-term outcome should be a more level playing field for compliant businesses across the UK.
“The reform is also likely to shift more stockholding and fulfilment activity into the UK, increasing demand for domestic warehousing and reducing reliance on direct-to-consumer air freight. This would enhance resilience within supply chains and support wider sustainability goals.”
He added: ”With implementation not due until 2029, responsible UK retailers and logistics providers will continue to operate in an uneven marketplace in the meantime.
“A phased programme introduced sooner would give businesses greater certainty, encourage investment in UK-based distribution models, and limit avoidance behaviours.”
The move follows the US decision to end its de minimis exemption earlier this year, while the European Union has also announced plans to end its exemption for goods worth less than €150 in early 2026.
When the US ended the de minimis exemption, online retailers shifted to new markets and implemented new supply chain strategies. E-commerce volumes between China and the US have been gradually recovering in recent months.
The last few years have seen several freighter operations launched to UK airports as e-commerce firms look to speed up the import of goods into the country.