The European Commission has written to the UK government saying the UK owes €2.7bn (£2.4bn) in customs duties on shoes and textiles imported from China.
The UK is accused of doing too little to prevent fraud after it was warned about the problem by the EU’s watchdog Olaf in 2017.
It begins a legal process which could end at the European Court of Justice.
HM Revenue and Customs said last year they planned to challenge Olaf’s earlier claims about lost revenues.
The Olaf investigation said the UK was a “significant hub” for so-called undervaluation fraud – where importers can profit from evading customs duties and related taxes.
The investigation found organised crime groups had been using fake invoices to undervalue goods being imported from China – many of which were destined for the black market in other parts of the EU, investigators claimed.
Olaf have said they had warned HM Revenue and Customs (HMRC) a number of times.
When the issue was raised last year a spokesman for HMRC said: “This is not a bill, it is Olaf’s estimate of evaded duty, and not one that is recognised by our experts who will be challenging Olaf on their calculations.”