New EU rules could impact Shein and Temu shoppers in UK

A European Union plan to impose import duty on cheap goods could dent Shein and Temu. The European Union has plans plans to impose customs duty on cheap goods in a shift that could hit imports from online retailers like Shein and Temu.

In the EU, the threshold for the levy is €150 (£127) and in the UK it is £135, enabling retailers such as Shein to ship products directly from overseas to shoppers in those markets without paying any import duty. In the UK, items valued at £39 or less also do not attract import VAT.

A European Commission spokesperson said: “In May last year we put on the table customs reforms for a simple, smarter and safer customs union. What we have proposed now is there is no exemption any more for packages valued at below €150.”

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John Stevenson, an analyst at Peel Hunt, said that the impact of a change in the rules on Shein “would be huge depending on the territory”. “The whole model is based on not paying duty,” he said. “It would have a massive impact.”

It comes as Shein is reportedly preparing to file for a London stock market listing. The China-founded, Singapore-headquartered firm's proposed listing could be one of the biggest deals for the London Stock Exchange in ten years, especially considering the current scarcity of new firms on the UK's public markets. Sky News has reported that Shein is getting ready to submit its initial public offering (IPO) prospectus to the Financial Conduct Authority (FCA) for approval.

On Tuesday, Simon Roberts, the boss of Sainsbury’s and Argos, called on a new government to look at unfair taxes including business rates and import duty. “I want to make sure that the loopholes that are currently in place are closed for some of the businesses that aren’t paying tax in the right way, so it’s a level playing field for everybody,” he said.