UK importers and e-commerce platforms must urgently rethink their supply chain strategies following the 2025 Budget decision to abolish the £135 customs duty relief for low-value imports. Currently, goods imported into the UK with a value of £135 or less are exempt from customs duty—a relief that has contributed to a surge in small parcel volumes, now averaging 1.6 million daily.
Levelling the Playing Field
The government has confirmed this relief will be removed by March 2029 at the latest, with a crucial formal consultation closing on 6 March 2026. The removal is explicitly designed to support UK high streets by eliminating the competitive advantage held by overseas sellers who ship small parcels duty-free, while domestic retailers face full tariffs on imported inventory.
The EU Shift in 2026
While the UK’s final date is March 2029, businesses trading with Europe face a much closer deadline. The European Council has agreed to remove its own €150 threshold and apply a fixed customs duty of €3 per item on small parcels from July 2026. Several member states, including Romania, plan to introduce similar levies as early as January 2026. This means UK exporters selling to EU consumers must brace for immediate price pressure and administrative changes in their primary export market.
Action Plan for E-commerce and Logistics
January 2026 is the time to engage with the UK consultation to influence the design of the new regime—such as the potential for simplified “duty buckets” or a single registration for duty and VAT. Businesses relying on high volumes of low-value parcels should model the cost impact of full tariff classification and consider appointing a UK fiscal representative if they operate overseas without a local presence. The “level playing field” is arriving, and those who automate their customs documentation now will be the long-term winners.
Navigating customs classification can be a minefield. Please contact us to review potential tariff exposure.