Major retailers have welcomed the government's review of a rule that allows small parcels to enter the UK duty-free, saying it gives overseas firms such as Shein and Temu an unfair advantage over British businesses.
The current rule allows international retailers to send packages to the UK worth less than £135 without incurring import taxes.
Former Dragons' Den star Theo Paphitis, whose retail group includes the Ryman and Robert Dyas, told the BBC that the measure was ruining UK High Streets.
Some retailers have argued that they are being undercut by overseas rivals, but a body representing small businesses said scrapping the exemption could raise costs for them and prices for customers.
Chancellor Rachel Reeves announced on Wednesday that the government planned to review the customs treatment of low-value products entering the UK following complaints from retailers.
The explosion of parcels being shipped under the measure has prompted increased scrutiny in recent years. While all retailers use the exemption, those who sell fast-fashion and cheap goods have seen sales soar.
It has fuelled the rise of Chinese retailers, such as online giants Shein and Temu, which ship low-value packages to the UK and other countries to reach millions of customers.
Speaking to BBC Radio 4's Today programme, Mr Paphitis said retailers had been lobbying government "for a very, very long time", arguing the rule had a devastating impact "on our retail landscape and our high streets".
He joined the bosses of Sainsbury's, Currys and the British Retail Consortium in welcoming the government's consultation on the rule.
UK businesses bringing in larger shipments have to pay taxes, and they also argue that cheaper goods might fail to meet the same environmental and ethical standards that they have to keep to.
Aside from concerns over unfair competition with domestic retailers, it has also been raised that governments could be missing out on potential tax income.
