UK businesses are expressing concerns over new tax regulations affecting low-value parcels sent to the US. Under the modified rules, parcels valued at under $800 will be subject to taxes beginning Friday. This change follows a decision by US President Donald Trump to eliminate the “de minimis” exemption, which previously allowed goods under this value to enter the US without incurring any border taxes.
The Federation of Small Businesses has highlighted that this shift will likely increase costs and pose challenges for smaller UK firms competing against larger brands. Helen Hickman, owner of a small hand-dyed wool company, has halted shipments to the US due to uncertainties about costs, which previously accounted for approximately 30% of her sales.
In addition to Hickman’s business, others like Jay Begum’s London-based wooden decoration company are also affected, with Begum noting a significant sales impact since the announcement of tariffs earlier this year. She mentioned that approximately 20% of her sales came from the US, and she may now need to invest more in marketing to bolster her domestic sales.
The recent changes will mean that packages valued below $800 will now face the same tariff rate as other goods imported from the UK, which currently stands at 10%. For US consumers, this could translate to an additional $30 to $50 in costs for typical orders, on top of shipping fees incurred by brands for handling taxes.
The Federation of Small Businesses has reported that over 20% of small firms may cease exporting to the US due to these changes. Statistics show that around 28,000 small businesses exported goods to the US in 2023. Some businesses, such as Sophie Arnold’s jewelry company, have ceased shipping to the US altogether, with Arnold indicating that she might need to consider other employment options if her sales decline persists.
The Federation is seeking broader support from the UK government, advocating for increased tax-free allowances to help mitigate the additional costs stemming from these new tariffs. The UK Treasury has been approached for comments, particularly in light of ongoing reviews of its own de minimis rules, which currently exempt low-value imports worth £135 or less from customs duties.
Source: https://www.bbc.com/news/articles/cvg3yjnq5zeo?at_medium=RSS&at_campaign=rss