Major Reform of Low-Value Import Customs Rules
The UK Government has launched a consultation on one of the biggest changes to customs procedures since Brexit, confirming that it intends to abolish the £135 customs duty relief for low-value imports.
The relief, which currently allows most goods valued at £135 or less to enter Great Britain free of customs duty (although VAT is generally collected at the point of sale), has come under increasing criticism from UK retailers who argue it places them at a competitive disadvantage and creates opportunities for undervaluation and abuse.
What is changing?
The Government proposes removing the £135 customs duty relief and replacing it with a new simplified regime. The changes are expected to be implemented no later than March 2029, allowing businesses time to adapt their systems and processes.
Under the proposals:
Sellers and online marketplaces would collect both customs duty and VAT at the point of sale, rather than the charges being collected when goods enter the UK.
Overseas sellers without a UK establishment would be required to appoint a UK fiscal representative responsible for accounting for the taxes due.
A simplified customs tariff with duty bands for low-value goods is being considered to reduce administrative complexity.
Enhanced shipment data requirements would improve HMRC's ability to identify undervalued or non-compliant consignments.
The Government is also considering an administrative charge to help fund increased border compliance and enforcement activities.
A significant change for e-commerce
HMRC estimates that around 600 million low-value consignments entered the UK during 2024, illustrating the scale of cross-border e-commerce and the importance of an effective collection system.
The proposals represent a fundamental shift in customs compliance, moving responsibility away from border collection and towards online marketplaces and overseas sellers. Businesses involved in cross-border online sales should review the consultation carefully, assess the impact on their supply chains and IT systems, and consider responding before the consultation closes.
Key takeaway
Although implementation is still several years away, these reforms will require significant operational changes for online retailers, marketplaces and overseas suppliers selling into Great Britain. Early planning will help businesses minimise disruption and ensure they remain compliant when the new rules take effect.
Need advice?
4 Eyes Ltd advises businesses on UK customs, VAT and cross-border e-commerce compliance. If your business sells goods to UK consumers, we can help you prepare for the new regime and assess the impact on your business model.