Government Reviews Tax Loophole to Combat Chinese E-commerce Threat Following Spring Fair's Industry Dialogue

Chancellor Rachel Reeves announces review of import threshold after concerns about Temu and Shein raised at Spring Fair 2025 

 

UK Chancellor Rachel Reeves has announced a formal review of the "de minimis" threshold—a tax rule allowing imports valued under £135 to enter the UK without customs duties. This significant policy review directly targets Chinese e-commerce platforms such as Temu and Shein, which have been scrutinised for exploiting this loophole to undercut British retailers through ultra-low pricing strategies. 

The announcement follows crucial industry discussions that took place earlier this year at Spring Fair 2025, where the threat from Chinese online marketplaces was prominently addressed through open dialogue with major stakeholders, including Temu representatives. 

 

 

Spring Fair: Pioneering Essential Industry Conversations 

 

Spring Fair 2025 at the NEC Birmingham provided a vital platform for transparent discussion about the challenges posed by Chinese e-commerce giants to UK retail businesses. In a groundbreaking move, Temu participated in a live session, engaging directly with retailers, industry leaders and consumers about concerns regarding their business practices and market impact. 

Retail entrepreneur and former Dragons' Den star Theo Paphitis, who attended the event, praised Spring Fair's initiative in bringing these crucial issues to light: 

"I would like to congratulate Spring Fair for being brave enough to have [Temu] here and have the conversation." 

 

 

Paphitis Calls for Action on Tax Loopholes 

 

During his keynote address at Spring Fair, Paphitis emphasized the importance of small businesses and called on the government to close tax loopholes exploited by large offshore companies to level the playing field. He stated: 

"Temu are operating legally but exploiting international rules that allow them to cross borders without regulation, shipping products directly from China to here. They don't pay VAT or import duties. They are not paying corporation tax. They are not employing people in the UK. They are not paying National Insurance, all of which means that they have an unfair advantage." 

These comments, delivered on Spring Fair's Inspiring Retail Stage, highlighted the significant competitive disadvantages faced by British retailers and appear to have resonated with policymakers, leading to the current government review. 

 

 

Creating a Level Playing Field Against Chinese Competitors 

 

The government's review will examine whether the current threshold creates unfair competition by allowing Chinese online retailers to bypass duties that British businesses must factor into their pricing. Beyond tax implications, concerns have been raised regarding product safety standards, sustainability practices and supply chain ethics of these Chinese marketplaces. 

 

Lauren Strivens Head of Marketing at Hyve Group, organisers of Spring Fair, commented: 

"At Spring Fair, we've always believed in creating spaces for honest dialogue about the challenges facing British retail. We're pleased to see that the conversations we fostered between traditional retailers, Chinese e-commerce platforms, and industry experts are now influencing policy decisions at the highest level." 

 

 

Looking Forward 

 

As the government conducts its review of the tax advantages currently enjoyed by Chinese e-commerce giants, Spring Fair remains committed to supporting independent British retailers and providing a forum for the industry to address evolving competitive challenges. 

The full discussion from Spring Fair 2025 remains available for viewing below: