Chancellor Rachel Reeves has confirmed she is closing a loophole that allows overseas online firms to avoid customs duties on small parcels to the UK.

Ms Reeves said she is to stop such firms from “undercutting our high street businesses by ensuring customs duty applies on parcels of any value” to “support a level playing field in retail”.

Currently, overseas retailers can send small parcels worth less than £135 to the UK without paying import duties – something British high street retailers have criticised as creating an “uneven playing field”.

Retailers including Next, Superdry and Primark have urged the Government to overhaul the policy, arguing it allowed international retailers such as Shein and Temu to undercut them on price.

Industry experts have suggested it costs the in

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