UK “de minimis” reforms could lead to higher costs for SMEs, BCC warns

The “de minimis” rule in the UK has long allowed low-value goods to enter the UK without paying customs duty.

But with the Government planning to scrap the exemption in 2029, the British Chambers of Commerce (BCC) has raised concerns that this could lead to higher costs for SMEs.

While the change was introduced to level the playing field for UK retailers, the BCC warns that smaller ecommerce businesses may struggle to absorb additional duties or per-item charges, and may be forced to pass on the costs in higher prices for shoppers.

What is the current “de minimis” rule?

Currently, the “de minimis” rule in the UK refers to the customs duty exemption for low-value imports worth under £135. Goods under this value qualify for customs-only duty relief, meaning they aren’t subject to import duties.

However, following the Autumn Budget last year, the UK Government announced that this threshold will be scrapped, although implementation has been delayed until March 2029 at the earliest. This move follows a similar direction in the United States, which scrapped its own $800 de minimis exemption in August 2025.

This decision was largely driven by concerns that the exemption had given online giants Shein and Temu a significant pricing advantage over British retailers. 

Adam Norman, Audit & Assurance Partner at Price Bailey, comments: “Ending the de minimis exemption is a significant step for UK retailers. It helps create a level playing field by addressing the long-standing concern that ultra-cheap overseas parcels distort competition.

“While shoppers will still be able to take advantage of lower-value overseas purchases in the short term, the move signals a major shift in the online retail landscape over the coming years.”

Scrapping de minimis could push prices up

While abolishing the de minimis exemption aims to create fairer competition, the British Chambers of Commerce (BCC) warns that removing it could push small ecommerce businesses and online stores to increase prices for customers.

A survey by the BCC’s Insight Unit reveals that 52% of UK goods importers say they would have to pass on the cost to consumers if import costs on small shipments increased by 5-10%.

Additionally, 60% of businesses reported that they didn’t know about the planned changes to the UK’s de minimis rules. Meanwhile, 24% of UK goods exporters said a 5-10% increase following the de minimis removal would put over half of their overseas sales at risk.

The BCC also expressed concerns about proposals to introduce charges on each item or consignment. There are worries that these fees could drive inflation, influence business decision-making, and have a disproportionate impact on SMEs and customers who rely on single-item ecommerce deliveries.

William Bain, Head of Trade Policy at the BCC, said value-added tax (VAT) should continue to be charged at the point-of-sale for these purchases.

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

How small businesses should prepare

While the change in de minimis isn’t expected for a while, small businesses should prepare early for the removal.

This includes reviewing supply chains and seeing how much they rely on importing low-value goods. If a lot of your stock comes in under £135, it might be worth considering alternative suppliers or combining shipments to keep costs down.

Businesses should also plan for the possibility of newer costs, as new duties or per-item charges could make imports more expensive. Therefore, you may need to review your pricing strategies and/or reassess supplier agreements to keep costs under control.

Moreover, it’s important to keep an eye on any updates from the Government so businesses can adjust their plans if needed, and avoid surprises when the changes come into effect.

“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,” Bain adds.

“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.”