Update on de minimis (low value import) rule
Background
The Low Value Import (or de minimis) rule allows businesses to send parcels with goods below £135 to customers in the UK without paying the tariff on that good. VAT is still applicable and platforms are expected to collect it and pay it direct to HMRC for businesses registered outside the UK.
There has been a large growth in the use of low value imports and as well as avoiding tariffs it has led to a rise in products not compliant with UK regulations due to reduced checks. There are also allegations of significant VAT avoidance by businesses nominally registered in the UK but not paying the tax. This has led to increasing concerns the rule is being used to undermine UK retailers who are paying tariffs, VAT and operating well run, audited supply chains
BRC Action
On 11 April we held a call with members to discuss the issue and concluded we should ask the Government to review the activity. After the meeting we wrote to the Exchequer Secretary, a Minister in the Treasury to ask for the review. You can read more about the meeting and a copy of the letter here
We also briefed the media on our call for a review, explaining the reasons and background on the Low Value Imports Rule. Our media activity was boosted by a number of members who reinforced our messaging and ensured our request received maximum publicity.
Government Action
The Government reacted quickly to our call. On the 23rd April the Chancellor published a statement agreeing to review the Low Value Imports rule. We have since spoken to both the Treasury and the Department of Business who are now preparing the consultation and indicated they are keen to hear the views of BRC and members.
Our intention is to set up a meeting with Government officials this Spring to hear more about the review and give members the opportunity to feedback their views. Depending on the feedback Government will either take action immediately or launch a wider formal consultation. Make sure you stay in touch with developments through the Trade and Logistics Community
