End of De Minimis Is Maximising Complexity & Cost for UK Retailers

Import duty loopholes are closing across the US, EU and UK, and retailers are feeling the squeeze. As tariffs bite back and forth across the Atlantic, businesses are facing greater costs, increased complexity, and higher risks when managing imports and exports.

The rise of ecommerce and a frostier global trade outlook have changed the conversation around low-value imports.

Historically, de minimis policies exempted goods below a certain value from duties, taxes and inspections—reducing admin, encouraging small businesses, and supporting private trade.

But two developments are bringing that era to a close.

De Facto Curtains for De Minimis Ecommerce

First, tightening customs restrictions, driven by post-Brexit realities and erratic US tariffs, are making it more expensive and complex to move goods internationally. As economic pressures mount, governments are extracting more revenue at the border through a wave of tit-for-tat regulation.

The most impactful example is the US’ removal of its $800 de minimis threshold for commercial shipments. This change hits the majority of UK businesses exporting low-value goods to the US, including items that were previously duty-free.

Second, the rise of ecommerce. Online shopping now accounts for 26.1% of UK retail revenue, up from just 7.1% in 2010. Fast fashion and ecommerce giants like Temu and Shein have flooded the UK market with low-value purchases shipped under the UK’s £135 de minimis cap. Chinese merchants alone accounted for 51% of UK online purchases this year.

Now, pressure from British retailers is prompting a government review of the UK’s de minimis threshold. With the Chancellor’s budget due on 26 November, retailers could be facing 20% VAT plus import duties on their Christmas stock.

The Transatlantic Loophole Is Shut

For many businesses, the end of the US de minimis exemption has been as disruptive as the tariffs themselves. Shipments that previously moved below customs thresholds are now subject to duties, documentation, and clearance fees—costs that often fall on the end customer.

Even small test consignments and direct-to-consumer deliveries have become more expensive and complex. Carriers are imposing clearance fees in addition to duties, which can significantly impact low-value shipments.

The result? Margin erosion. Larger brands are absorbing the costs to maintain market position, but others are making tough choices, halting exports, passing costs onto customers, or exploring alternative markets.

Peak Season: Make or Break

Peak season is critical for retailers, and the end of de minimis exemptions could be a fatal blow. Black Friday, Cyber Monday, Halloween and Christmas all drive serious online spending. UK consumers now expect cross-border shopping to be as reliable as domestic purchases.

But the added complexity of customs procedures for small purchases could undermine that reliability, and affordability, just when it matters most.

This disruption comes at a time when businesses are already feeling the pinch from reduced consumer spending and recent changes to National Insurance contributions.

Navigating the Storm

For businesses importing to the UK or selling to the US, a meticulous customs clearance setup is more important than ever. Small errors in trade compliance can lead to delays, charges, and even seizure of goods.

For organisations unfamiliar with this system, an experienced partner can be the difference between success and costly failure. Contact one of our experts today.