Hull and Humber Chamber of Commerce

The British Chambers of Commerce (BCC) has warned that removing the UK’s tariff exemption for low value imports could risk pushing up prices, harming small businesses and reducing trade intensity.

The government is considering the move after the US removed its ‘de minimis’ exemption. The EU has also said it will do the same and introduce new handling charges for cheaper packages as well.

The BCC’s warning comes as new research of 608 businesses (30% of whom are goods importers) by its Insight Unit found:

Half of UK goods importers (52%) say that if their import costs increased by 5-10% on small shipments, they would need to pass this on to consumers. Only one fifth (20%) said they could absorb them.
Almost two thirds of businesses (60%) did not know about the planned change to UK de minimis or were unsure if they would be affected.
A quarter (24%) of UK goods exporters said an increase in costs of 10-15%, due to the removal of other countries’ de minimis, would put more than half of their overseas sales at risk.

As well as raising prices or absorbing the costs, 21% of firms said they would switch suppliers and 20% would consolidate shipments to reduce duty impact. A further 12% would scale down activity, pointing to reduced trade volumes.

A government consultation into the plans closed last Friday (March 6) and the BCC has submitted a response. It said that while the UK must respond to action by the US and EU, to avoid unfair competition from cheaper goods flooding our domestic market, any reforms must be proportionate. They also need to align with the international response and focus on enforcement rather than blunt cost increases.

The Chamber network is particularly concerned about proposals to introduce charges per item or consignment. The fear is these fees would be inflationary, distort business behaviour and disproportionately affect SMEs and customers who use e-commerce for single‑item deliveries.

William Bain, Head of Trade Policy at the British Chambers of Commerce, said:

"E‑commerce matters greatly to the UK economy and global trade. We know the trend globally is to abolish de minimis thresholds and levy duties on low value imports given their huge growth in recent years.

“The US has scrapped its de minimis threshold, and the EU is planning new charges on cheaper imports from July this year. This will put our exporters’ sales under pressure, and we must respond to ensurewe have a level-playing field.

“But we would urge Ministers not to introduce charges per item or consignment by import. Our research shows the increased costs will feed through into higher prices.

“The Government should also retain VAT being charged at point of sale on transactions for these purchases – a practice followed by many countries in global trade. Its retention would avoid unnecessary complications and additional friction on cross‑border e‑commerce sales.

“As any UK changes will not happen until 2029 at the earliest, we would also urge firms to be on high alert to report suspected dumping or import surges. Until we catch up, the UK will be at a competitive disadvantage and the Trade Remedies Authority will need good intel to protect our industries.”

He added that any removal of the de minimis exemption should be carefully phased in, avoid any new flat-rate fees and be focused on targeted enforcement.

This approach would better protect consumers, support SMEs and maintain the UK’s trading competitiveness, while meeting policy objectives.