European judges say the tax authorities did not collect correct taxes on imports of undervalued Chinese clothing.
In a ruling on Tuesday, the European Court of Justice upheld the commission's claim the UK had not paid the correct tax revenue to the EU.
EU members have to pass on a share of the taxes that they collect on imports to the commission, as part of their contribution to the EU budget.A UK government spokesperson said: "Throughout, we've made the case that we took reasonable and proportionate steps to tackle the fraud in question and that the Commission vastly overstated the size and severity of the alleged fraud.
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