The End of the £135 Low-Value Import Relief: What UK Brands Importing Stock Need to Prepare For

The UK is removing the customs duty relief on imported consignments worth £135 or less. From a date the Treasury will set, and by October 2028 at the latest, these low-value imports will pay duty at normal UK Global Tariff rates, collected from sellers and online marketplaces. Brands relying on small overseas parcels should model the cost now.

The headline is settled, but a lot of the detail is not. This guide sets out what the government has confirmed, what is still open, who is most exposed and the practical steps to take while there is time, including when bulk import into a UK bonded warehouse service makes more sense than shipping parcel by parcel. It is general guidance rather than legal or tax advice: confirm how the rules apply to your products with a customs broker or tax adviser before you change pricing or supply routes.

What Is the £135 Low-Value Import Relief?

The £135 low-value import relief means no customs duty is charged on goods arriving in consignments valued at £135 or less. The limit applies to the whole consignment, not to each item in it.

VAT is a separate matter and already applies. Sellers of consignments of £135 or less to UK consumers in Great Britain must charge and account for VAT at the point of sale, and online marketplaces take on that liability when they facilitate the sale. What changes is duty. For brands shipping single orders from an overseas warehouse or supplier, duty has never been part of the unit cost, and that is what ends.

What Has the Government Confirmed?

The government has confirmed the relief will go and has brought the deadline forward by six months, to October 2028 at the latest. The removal was announced at Budget 2025, the consultation ran from 26 November 2025 to 6 March 2026, and the acceleration was announced on 23 June 2026.

The government's consultation response followed in July 2026, alongside draft primary legislation. The HMRC policy paper of 13 July 2026 says the change amends the Taxation (Cross-border Trade) Act 2018 and will take effect on a day the Treasury sets by regulations, no later than October 2028. So October 2028 is a backstop, not a fixed start date. Detailed rules on data, compliance and enforcement will come through secondary legislation and HMRC notices.

The stated aim is fairer competition: high street retailers pay full duty on stock they import as freight, while many overseas sellers have shipped small parcels duty free.

How Will Duty Be Charged on Low-Value Imports?

Duty will be charged at the normal UK Global Tariff rate for each product, based on its classification. The government considered a simplified tariff with a few flat bands and decided not to introduce one.

In practice, that puts product data at the centre of the cost. UK import declarations use a full 10-digit commodity code, and the code decides the duty rate. The consultation response also says sellers and online marketplaces will provide item-level data to HMRC, with each consignment given a unique reference number for clearance. The exact data fields are still being finalised.

Duty is also worked out on the customs value, not simply the price you paid the supplier. Under HMRC's rules, transport, insurance and loading costs up to the UK border are included in that value, so freight-heavy, low-price products can carry more duty than a quick calculation on the product price suggests.

Who Will Pay the Duty, and How Often?

Sellers, or online marketplaces where they facilitate the sale, will be responsible for paying the duty. They will pay quarterly, with the option to stagger payments so they line up with VAT return cycles.

Overseas sellers and marketplaces: those without a UK presence will need to appoint a UK fiscal representative. The representative takes on joint and several liability alongside the seller, so HMRC can pursue either party for the full debt. Expect representatives to price that risk into their fees and to ask for strong data and controls before they sign up.

An extra fee: the government will introduce an additional fee on low-value imports. It has said the fee must be justified, proportionate and linked to cost recovery, but the amount and structure have not been set.

Admin costs: the policy paper expects one-off system changes to meet the data requirements, plus ongoing data entry and the cost of a fiscal representative where one is needed.

What Is Excluded or Stays on Standard Rules?

Not every small parcel moves into the new regime. Some goods stay on standard import arrangements, and genuine gifts keep a separate relief.

• Gifts: genuine non-commercial consignments of £39 or less sent between private individuals keep their relief.
• Consignments over £135: these already go through standard import customs and are unaffected.
• Certain goods: goods subject to excise duty, trade defence measures or import restrictions, and goods with non-value-based tariffs, stay on standard arrangements.
• Reliefs and special procedures: if you want to claim a relief, tariff suspension or quota, or use a special procedure such as customs warehousing, you will need standard import arrangements rather than the new low-value route.
• Northern Ireland: the consultation response says Northern Ireland is outside its scope, so check separately if you ship there.

What Is Still Undecided?

Three things that affect your margin are still open: the size and shape of the fee, how VAT will be collected, and the exact start date.

On the fee, the consultation used illustrative figures of £0.50, £2 and £5 per consignment, and most respondents favoured a per-consignment charge. None of these is a confirmed rate. On VAT, the government says it will keep considering how VAT collection fits the new customs arrangements, so the current point-of-sale model could change. Until these are settled, plan with ranges rather than single figures and revisit your numbers when secondary legislation and HMRC guidance appear.

Who Is Most Exposed?

The brands most exposed are those whose model depends on individual duty-free parcels crossing the UK border. That covers:

• Overseas brands shipping direct-to-consumer orders into the UK from a warehouse abroad.
• Marketplace sellers fulfilling UK orders from outside the UK.
• UK brands that have suppliers or dropship partners send orders straight to customers from overseas.
• Low-price, high-volume categories where a few pounds of duty and fee per parcel is a large share of the selling price.

UK brands that already import stock in bulk and fulfil from a UK warehouse are largely unaffected, because a container or pallet shipment is well over £135 and already pays duty at import. The change mainly hits the gap between those two models, which is why it is worth looking again at where your stock sits.

Steps to Take Now

Start with your product data and your landed cost, because both drive the duty bill whatever the final rules look like.

1. Audit product data. Confirm every SKU has an accurate 10-digit commodity code, country of origin and customs value. Wrong codes mean wrong duty, and item-level data will be checked.
2. Model landed cost per order. Add duty at the relevant tariff rate, calculated on customs value, plus a fee scenario at the low, middle and high end of the consultation range. Test whether current retail prices still work.
3. Check origin and preferences. If your goods might qualify for a preferential rate, ask your broker how that would interact with the low-value route, since claiming a preference means standard import arrangements.
4. Review supplier and marketplace terms. Find out who will declare and pay duty under each contract, and what your marketplace plans to pass back to sellers.
5. Plan for a fiscal representative if you sell into the UK without a UK presence. Availability and pricing may tighten as the deadline gets closer.
6. Compare fulfilment models. Cost parcel-by-parcel shipping against bulk import into a UK warehouse, including storage, stock holding and delivery speed.
7. Plan customer communication for any price or delivery changes well before they take effect.

Bulk Import Into a UK Warehouse: When It Beats Parcel-by-Parcel

Bulk import tends to win once demand is steady enough to forecast. Instead of thousands of parcels each carrying duty and a fee, you bring stock in as freight, deal with duty once per consignment and fulfil orders domestically.

That changes the shape of your costs. One customs entry replaces thousands of parcel declarations, international parcel postage becomes UK delivery, and customers get faster, more predictable delivery with UK returns. It is the same case for using a UK-based fulfilment partner instead of an overseas 3PL, now with a duty saving attached.

It will not suit everyone. You need forecasting discipline and cash to hold stock, and a slow-moving or very wide range can tie up money. Bonded storage softens the cash point: imported goods held in an HMRC-approved bonded warehouse have duty and import VAT suspended until they are released for sale in the UK, so you pay as stock moves rather than when the container lands. For the mechanics, see how duty deferral works in a bonded warehouse.

Bonded Storage and UK Fulfilment From Northampton

Fulfil with Synergy is a founder-led UK third-party logistics (3PL) provider that runs multi-channel, retail and Amazon Seller Fulfilled Prime fulfilment for growing and household brands from purpose-built facilities in Northampton, combining AutoStore automation and the RedPrairie Dispatcher warehouse management system with high-touch services such as kitting, bonded warehousing and returns management.

For brands rethinking imports before October 2028, the relevant part is bonded storage. Fulfil with Synergy is an HMRC-approved bonded operator, so goods are stored without duty or VAT being charged until they are released for sale in the UK. If stock leaves the bonded warehouse for another market, or goes back to the supplier after a quality rejection, no UK duty or VAT is payable. Damaged or unsellable stock can be written off as non-dutiable.

That supports a simple model: import in bulk, hold stock in bond, then break it down and release it to UK and other markets as orders need it, keeping bonded and duty-paid stock side by side. Bonded stock sits in the same RedPrairie Dispatcher system as everything else, with real-time visibility to unit, SKU, batch and location and a full stock movement audit trail, so you can see exactly what has been released and what is still under bond.

Customs set-up and margin modelling sit with specialists. Through the Fulfil Plus partner network, clients can reach compliance experts covering VAT, customs and UK, EU and IOSS set-ups, and fractional finance expertise for unit economics, margin bridges and landed-cost clarity. That is the work a brand needs when duty enters its unit costs for the first time.

FAQ

When does the £135 customs duty relief end?

The relief ends on a date the Treasury will set by regulations, and no later than October 2028. That deadline is six months earlier than first planned, after the government accelerated the change on 23 June 2026. Until then, consignments of £135 or less still enter the UK without customs duty, although VAT already applies at the point of sale. Treat October 2028 as the latest possible date rather than a fixed start. The exact day, the detailed data rules and the fee will come through secondary legislation and HMRC guidance, so build your plan to be ready earlier and check GOV.UK for updates.

Will UK brands that import stock in bulk pay more duty?

Mostly no. A bulk shipment by container or pallet is well over £135, so it already goes through standard import customs and pays duty at the normal tariff rate. The change targets individual low-value parcels sent from overseas to UK customers. Where UK brands can be caught is in hybrid models, for example a supplier or dropship partner sending single orders straight to customers from abroad, or small top-up shipments of samples or stock. Check how each of your inbound routes is declared today, because any route that relies on the £135 relief will start paying duty and the new fee.

Do overseas sellers need a UK fiscal representative?

Yes, under the government's plans. Sellers and online marketplaces without a UK presence will need to appoint a UK fiscal representative, and that representative takes on joint and several liability for the customs debt alongside them. The detailed rules, including who can act as a representative, will follow in secondary legislation. Because representatives carry real financial risk, expect them to charge for it and to ask for reliable product data, commodity codes and payment controls. Overseas brands with steady UK demand may find that holding stock in a UK warehouse is simpler than parcel-by-parcel selling with a representative.

How does a bonded warehouse help once the relief ends?

A bonded warehouse lets you import stock in bulk without paying duty or import VAT when it arrives. Both are suspended while goods are held in an HMRC-approved customs warehouse and become payable when stock is released for sale in the UK. Goods re-exported from the warehouse pay no UK import duty or VAT. For brands moving from small parcels to bulk freight, that reduces the cash tied up in a large shipment, because you pay as stock moves rather than all at once. It also lets you split one consignment between UK sales and other markets, paying UK duty only on what is sold here.

Will VAT on low-value imports change?

Not yet, and possibly not at all. Today, sellers of consignments of £135 or less to UK consumers charge VAT at the point of sale, and online marketplaces account for it when they facilitate the sale. The government has said it will keep considering how VAT collection fits the new customs arrangements, and respondents to the consultation were divided on whether point-of-sale collection still works once duty is due. Separately, ministers are reviewing VAT rules for businesses that trade through online marketplaces. Keep your current VAT processes in place and watch for HMRC guidance before October 2028.

If your margins rely on duty-free parcels from overseas, now is the time to model the alternatives. Talk to Fulfil with Synergy about bulk import, bonded storage and UK fulfilment, and we will help you work out whether holding stock in Northampton beats shipping parcel by parcel.

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