UK £135 customs duty relief to end: Timeline and new rules

Customs duty relief for commercial consignments worth £135 or less entering Great Britain is set to end. The UK government plans to introduce the new arrangements by October 2028 at the latest. An exact commencement date has not yet been set. The published basis is HMRC's policy paper on low-value import reform and the accompanying July 2026 reform documents.

For sellers, online marketplaces and logistics providers, the change goes beyond the amount of duty. Commodity codes, item data, payment responsibilities and consignment references will need to work together. The government also intends the reform to support fairer competition between high street businesses and international online retailers.

As of 26 October 2026. This article distinguishes current rules, announced reforms and unresolved implementation details. The reform concerns Great Britain: England, Scotland and Wales. Goods movements into Northern Ireland under the Windsor Framework must be considered separately.

What is planned for UK low-value imports?

• Timeline: Introduction by October 2028 at the latest, with commencement to be set by regulations.
• Duty calculation: Classification under the UK Global Tariff rather than a simplified flat-rate tariff.
• Responsibility: Sellers or online marketplaces facilitating a sale are expected to pay duty to HMRC quarterly and provide item-level data.
• Fiscal representation: A UK-based fiscal representative with joint and several liability is planned for sellers and marketplaces without a UK presence.
• Still open: The amount and charging basis of an additional government fee, the future VAT collection model and technical specifications.

These points describe the published reform position. HM Treasury's consultation response provides for further legislation and implementation guidance; the new obligations do not already apply to today's consignments.

What are the current rules for consignments up to £135?

Customs duty and VAT are separate charges. The current low-value imports (LVI) relief concerns customs duty. It does not mean that all goods up to £135 can be imported free of tax.

Since 1 January 2021, UK VAT on covered sales into Great Britain has generally been accounted for at the point of sale. Depending on the sales model, the seller or online marketplace is responsible. Where a UK VAT-registered business customer provides its UK VAT number, that customer can account for VAT under the reverse charge. Exceptions include excise goods and non-commercial consignments. HMRC's guidance for direct sales explains the distinction.

The threshold applies to the consignment, rather than each individual item. For the current VAT arrangements, it is generally the intrinsic value of the goods that matters. Transport and insurance costs shown separately on the invoice are excluded when assessing the £135 limit.

Many parcel operators and customs intermediaries use the Bulk Import Reduced Data Set (BIRDS) for customs declarations. Authorised businesses can declare multiple eligible low-value consignments in one declaration with a reduced dataset. Conditions include VAT being accounted for as supply VAT rather than import VAT. Excise goods, restricted goods and consignments above the value limit are excluded. HMRC: BIRDS eligibility and exclusions.

When will the £135 customs duty relief end?

October 2028 is the announced latest implementation target, rather than a confirmed commencement date. The original target was March 2029. The government subsequently accelerated the timetable.

The draft legislation provides for the Treasury to appoint commencement through regulations made by statutory instrument. Businesses should track both the start date and publication of the technical requirements as distinct implementation milestones.

Which goods will use the new LVI arrangements?

The new arrangements are intended to be mandatory for eligible commercial consignments worth £135 or less. Standard import arrangements will remain relevant for excluded goods and procedures. The exclusions include:

• consignments worth more than £135;
• goods subject to non-ad valorem tariffs, such as a duty per kilogram;
• goods subject to import restrictions or licensing requirements;
• excise goods;
• goods subject to trade defence measures.

Businesses claiming customs relief, a tariff suspension or quota, or using a special customs procedure, are expected to continue using standard import arrangements. Whether and how preferential duty claims can be supported within the new LVI system remains under consideration.

The separate relief for genuine gifts between private individuals worth £39 or less is intended to remain. It is not an alternative route for commercial online orders.

Which duty rates will apply under the UK Global Tariff?

Great Britain does not plan a simplified LVI tariff with flat rates or tariff buckets. Goods will need to be classified under the UK Global Tariff (UKGT). Preparing reliable ten-digit UK commodity codes is therefore a practical priority.

Removing the value-based relief does not automatically create a positive duty amount for every product. The applicable tariff may still provide a zero rate. A valid preference may also reduce duty, subject to the rules of origin and the appropriate procedure. Dispatching goods from the EU alone does not establish EU preferential origin.

Businesses should assess the UKGT rate, origin and potential preferences for each product group. Any additional government fee and service providers' charges should be treated separately.

The British plans differ from the EU's transitional model. Businesses supplying both markets should maintain separate rules. Our article on the end of the EU €150 customs duty exemption explains the EU approach.

Who will pay the duty, and who needs a fiscal representative?

Sellers or online marketplaces facilitating the sale are expected to pay duty to HMRC. Quarterly payments are planned, with the option to align them with VAT return cycles. This is intended to enable duty collection at the point of sale.

For sellers and marketplaces without a UK presence, the government plans to require a fiscal representative. It expects this to be a UK-based business with a permanent place of business, assuming joint and several liability alongside the overseas seller or marketplace. Detailed requirements and operating arrangements still need to be specified.

An existing contract with a parcel operator or customs agent does not automatically resolve this liability question. Sellers should establish who will supply data, handle declarations, pay charges and be able to act as a fiscal representative. Customs agents and fiscal representatives have different roles, even if one provider could offer both services.

Which data and references will matter?

Sellers and marketplaces are expected to provide item-level data to HMRC. The mandatory dataset, formats and interfaces have not yet been published. Product descriptions, commodity codes, values, origin and links to orders are useful starting points for data preparation; they do not replace the future technical specification.

Each consignment is also expected to receive a unique reference used to clear the goods on arrival. Clearance is planned through temporary storage facilities or the Goods Vehicle Movement Service (GVMS) at roll-on/roll-off locations. The seller and the business clearing the goods may be different entities.

The planned LVI consignment reference must be distinguished from the vehicle movement's Goods Movement Reference (GMR). Our guide to GMR and GVMS explains how the current GMR brings together customs references for a crossing. Implementation requirements will define how the new LVI references fit into that process.

Data that continues to be collected through safety and security declarations is not expected to be requested again through the new LVI arrangements at launch. This does not remove existing safety and security requirements.

What remains open on fees and VAT?

The government has announced an additional government fee. Its amount and charging basis are not yet fixed. The consultation's £0.50, £2 and £5 figures were illustrative examples, rather than agreed fee rates. Any government fee must also be distinguished from a parcel operator's clearance charge.

The future VAT collection model remains open too. Options include alignment with existing VAT return-based accounting and closer integration with customs processes. Businesses should continue to operate today's VAT arrangements correctly and implement future changes against the published requirements.

What sellers and logistics providers can prepare now

1. Measure the affected volume. Analyse UK consignments up to £135 by product group, sales channel, value and current clearance method.
2. Improve product master data. Maintain traceable descriptions, UK commodity codes and origin information. Inaccurate data can already cause queries, incorrect tax treatment or delays today.
3. Model charges separately. Keep customs duty, VAT, a potential government fee and service provider charges separate. Current tariff rates can support scenarios, but do not guarantee the rates at the future start date.
4. Clarify roles and liability. Agree responsibilities with marketplaces, carriers and customs partners. Businesses without a UK presence should assess the availability of fiscal representation.
5. Connect references and returns. Link orders, items, consignments and refunds consistently. Our overview of customs clearance for returns from the UK and Switzerland covers the reverse flow.
6. Plan implementation around the specifications. Track detailed legislation, data schemas and interfaces, then test the full chain from checkout through to reconciliation.

Build UK customs processes on reliable data

Declarium already supports CDS import and export processes as well as GVMS. Shipment data can be imported through Excel/CSV uploads, AI extraction from invoices and delivery documents, or the REST API. UK Trade Tariff data can support goods classification.

This helps businesses structure their existing UK workflows and improve data quality. Technical support for a future LVI procedure depends on HMRC's outstanding requirements. Our solution for e-commerce customs clearance with Great Britain and Switzerland shows how order, product and shipment data can already be brought together.

Sources

• HMRC: Low-value import reform policy paper, 13 July 2026
• HM Treasury: LVI reform consultation response, 13 July 2026
• HMRC: Draft LVI legislation, 13 July 2026
• HM Treasury and HMRC: Tax Update 2026 and implementation timetable
• HMRC: BIRDS eligibility and exclusions
• HMRC: VAT on overseas goods sold directly to UK customers