UK speeds end of parcel tax loophole, shifting pressure on value retail

Britain is speeding up the end of its low-value parcel duty loophole, moving the cutoff for customs duty relief on imports worth £135 or less to October 2028, six months earlier than planned.

The UK first announced a review of low-value import treatment in April 2025 after high street retailers said they were being disadvantaged. The consultation on the change ran from 1 p.m. on Nov. 26, 2025, to March 6, 2026, and the government accelerated the timetable after listening to industry. Value-added tax already applies to those imports after reforms in 2021, but the customs-duty relief had still given ultra-low-price sellers room to keep flooding the market with small parcels. Sellers such as Shein have built on that model, and rivals like Temu and Amazon Haul have pushed shoppers to expect rock-bottom prices and fast delivery.

Big Lots is the nation’s largest broad line closeout retailer, and its sourcing depends on finding goods others cannot or do not want to sell at full price. In a May 4, 2024 filing to the U.S. Securities and Exchange Commission, Big Lots sourced closeouts from production overruns, packaging changes, discontinued products, order cancellations, liquidations, returns and other supply-chain disruptions. It also used engineered closeouts and other sourcing options.

If overseas bargain parcels become less frictionless, the pressure does not disappear. It moves into the buying office and then onto the floor, where managers have to keep shelves full, circulars sharp and price points believable. That can mean thinner assortments in some promoted categories, a faster turnover in the goods that do arrive, and more customer pushback when a shelf tag no longer looks like a deal compared with what shoppers see online.

Big Lots operated 1,392 stores in 48 states and an e-commerce platform as of May 4, 2024.