Rachel Reeves bows to calls to close tax loophole amid fears UK could become dumping ground for cheap Chinese goods
The Chancellor has bowed to calls to act over a tax loophole amid warnings the UK risks becoming a dumping ground for cheap Chinese goods.
Retailers say current rules allow the likes of online giants Shein and Temu to dodge import duties by sending parcels direct from their factories to customers’ homes.
Up to three million small parcels come into the UK every week — but they are exempt from VAT and customs duties if they are worth less than £135 each.
Bosses from British firms including Next, Kingfisher, Sainsbury’s, Superdry, Boohoo and Primark have publicly complained that there should be a level playing field.
However, the Government has now been sparked into action by US President Donald Trump’s tariffs blizzard.
It has increased concerns that Chinese factories having to focus elsewhere will dump excess stock in the UK, where there is an instant tax advantage.
Chancellor Rachel Reeves has signalled the “new era of global trade” meant that it was important to “protect fair and open trade”.
And Business and Trade Secretary Jonathan Reynolds said: “This Government won’t stand idly by while cheap imports flood our markets and harm British industries.”
The same tax loophole is being closed in the US, and the EU is also looking at a similar change.
Shein had sales of £1.5billion in the UK in 2023, with critics saying the Treasury is missing out on taxes.
Separately, concerns have been raised over safety standards, with a girl of 11 suffering burns requiring skin grafts after buying a nail glue from Temu last year.
The British Retail Consortium welcomed the Chancellor’s review, saying there are fears many of the goods dumped in the UK “would fail to meet environmental and ethical standards.”
Theo Paphitis, former Dragons’ Den star and owner of Ryman stationers, said: “The sector has been crying out to level the unfair playing field.”
Meanwhile Shein — considering a London stock market listing — insisted its success was due to its “on-demand business model, not exemptions that retailers receive under current tax regimes”.
Don job? Not much Elon-ger
Elon Musk will “significantly” reduce his role with the Trump administration after profits plunged at Tesla.
The electric car company saw them crash by 71 per cent to $409million (£307million) — the lowest level since during the pandemic. Tesla’s earnings and revenues also missed analyst expectations.
Sales of its EVs have slumped with some consumers boycotting the brand over Mr Musk’s White House role.
Shares in Tesla have halved since mid-December, while the firm has also warned that Trump’s tariffs would impact its supply chain.
Mr Musk says his work to get the US government’s “financial house in order is mostly done”.
The tycoon, who has boasted of sleeping on factory floors to show his “hardcore” work ethic, said he would “be allocating far more of my time to Tesla” from next month.
He has faced calls to step down from some investors who claim he has lost focus and is “too divisive”.
Sale bid ‘Reck-ed’
The maker of Durex and Dettol has warned that market turmoil caused by US President Donald Trump’s tariffs could delay the auction for its cleaning brands.
Reckitt put its “home” division — which includes Cillit Bang and Air Wick — up for sale last year.
Boss Kris Licht said that volatility would now “impact the timeframe”. It came as sales in the division fell 7 per cent to £482million.
Shake & stirred
Online retailer THG has rejected a former director’s bid for its MyProtein brand that priced it at more than the entire firm’s market value.
Iain McDonald, who left THG last year, made an offer via investment vehicle Selkirk Group, valuing the fitness shakes and supplements arm at up to £600million.
THG, which is now valued at just £407million, said it was rejecting the bid because it was “wholly unsolicited and highly conditional”. Selkirk said it believed MyProtein was “dramatically undervalued”.
Tenpin bowling chain Hollywood Bowl has scored an 8.4 per cent rise in revenues to £129.2million in the past year.
The business has opened sites in the UK and Canada and plans two more here this year. It wants 130 alleys overall by the next decade.
Nat’s all, folks
NatWest’s chairman says the bank has learned from the financial crisis as it heads back to full private ownership.
Rick Haythornthwaite said the bank had “fixed the issues of the past” at its annual shareholder meeting yesterday — 16 years after its taxpayer-funded bailout.
Despite NatWest increasing performance-linked pay for senior bankers, he noted “Let’s not forget the lessons of pre-2008 where it all got a bit out of sync.”
The Government’s share has dropped below 3 per cent and is set to be offloaded soon.