The EU's €150 Duty Exemption Has Gone: What It Changes for UK Brands Shipping to European Customers

Since 1 July 2026, low-value parcels sent from the UK to EU consumers no longer arrive duty free. The EU now charges a flat €3 customs duty per item in consignments worth up to €150, and a separate €2 per item handling fee is expected from 1 November 2026. Both add a new cost line to most European orders.

For years, a UK brand sending a low-value parcel to a customer in the EU could rely on one useful rule: consignments worth €150 or less arrived without customs duty. That rule, often called the EU de minimis, has gone. This guide explains how the new charges are counted, what they do to your margin, and what your fulfilment partner, from courier set-up to bonded warehousing for imported stock, should already be doing about it. For the wider basics of selling overseas, start with our guide to cross-border ecommerce fulfilment for UK brands.

‍General guidance only, based on European Commission guidance checked on 12 October 2026. This is not legal or tax advice: confirm how the rules apply to your products with a customs broker or tax adviser.

What Changed on 1 July 2026

On 1 July 2026 the EU abolished the customs duty relief that let consignments worth €150 or less enter duty free, and replaced it with a temporary flat duty of €3 per item. The legal basis is Council Regulation (EU) 2026/382 of 11 February 2026.

According to the European Commission's guidance on the temporary duty, it applies to distance sales of goods to EU consumers in consignments up to €150, whichever VAT scheme the seller uses: the Import One Stop Shop (IOSS), the special arrangements or standard import VAT. The UK sits outside the EU customs territory, so a UK brand selling direct to customers in France, Germany or Ireland is in scope.

The €3 is a customs duty, not a tax on value. It does not replace import VAT, which is still collected either through IOSS at checkout or when the parcel is imported.

How the €3 Duty Is Counted

The duty is charged per item, and an item means goods in the same consignment that share a tariff classification (and, where the declaration requires it, the same description and origin). The number of units does not matter; the number of distinct items does.

The Commission's own examples make this clear. Five identical T-shirts are one item and cost €3. A T-shirt and a watch are two items and cost €6. The Commission's customs guidance of 5 October 2026 adds that the duty and the handling fee "will automatically apply per declaration line irrespective of the quantity".

The type of customs declaration also changes the count. The simplified H7 declaration used for consignments up to €150 classifies goods at six-digit HS code level, while a full H1 declaration uses the ten-digit code. In the Commission's worked example, three articles that sit on one H7 line become three separate lines on an H1 declaration, so the same parcel costs €3 in duty on one route and €9 on the other. Tariff codes are no longer a paperwork detail; they are a price. Our guide to how duty, VAT and documentation errors delay cross-border orders covers the classification mistakes that cause most problems.

The €2 Handling Fee Expected From 1 November 2026

A separate Union handling fee of €2 per item is expected to apply to distance sales from 1 November 2026. The Commission adopted the delegated regulation setting the fee, C(2026) 6694, on 21 September 2026, and Article 1 sets the fee at €2 per item.

The regulation enters into force once it appears in the Official Journal of the European Union and applies ten days later, after a scrutiny period by the European Parliament and the Council reported to end on 21 October 2026. That is why 1 November is an expected date, not a fixed one.

According to the Commission's guidance, the fee is a flat amount whatever the value of the goods, also applies to distance sales in consignments above €150, and is neither time limited nor refundable. Some carriers describe it per parcel; the adopted text says per item, so check carrier invoices once it starts.

Product Identifiers Become Mandatory on 1 November 2026

From 1 November 2026, customs declarations for these e-commerce consignments must include product identifiers, according to the Commission's guidance. They have been voluntary since 1 July 2026.

The minimum is a merchant product identifier and a manufacturer product identifier, plus a standardised identifier where one exists for the product. In practice this means SKU-level data has to flow from your product catalogue, through your fulfilment partner's systems and into the declaration for every parcel, alongside the commodity code and country of origin.

The Preferential Origin Exception and the IOSS Trade-Off

Goods that qualify for preferential origin, which can include UK-origin goods under the UK and EU trade agreement, are excluded from the €3 duty, but only if VAT was not collected through IOSS and the goods are declared on a full H1 declaration. Every consignment that uses IOSS pays the €3 duty, whatever declaration type is used.

The EU and UK Trade and Cooperation Agreement provides zero tariffs on goods that meet its rules of origin, usually supported by the exporter's statement on origin. Origin means where the goods were made, not where they were shipped from, and GOV.UK's rules of origin guidance explains that goods using materials from other countries must be sufficiently worked or processed to qualify. A candle made in Northamptonshire may qualify; a phone case made overseas and sold from a UK warehouse will not.

Taking the origin route has a cost. Without IOSS, import VAT is collected at import rather than at checkout, so either your customer pays at the door or you arrange delivered duty paid shipping through a representative, and a full H1 declaration needs more data, including the ten-digit commodity code. Model both routes with a customs broker before switching.

Who Pays: Your Brand or Your Customer?

The declarant owes the duty and the handling fee. Where IOSS is used, the declarant is the IOSS holder or its representative, so the cost sits with you; without IOSS, a carrier or broker typically declares the goods as the importer's representative and passes the charges on, often to your customer at the door.

Under the Commission's guidance, a consumer can act as declarant only as a last resort, in the few member states that offer a free online declaration system. That leaves UK brands with a commercial choice: absorb the charges, build them into EU prices, or show them clearly at checkout. Avoid parcels that arrive with an unexpected demand for payment, because charges at the door are one of the fastest routes to a refused parcel and a lost customer. Your delivery terms, delivered duty paid or delivered at place, decide who sees the bill; our guide to EORI numbers, Incoterms and customs paperwork explains how to set them.

Some member states also add their own national charges on low-value parcels. Royal Mail's EU trade guidance lists current examples, so check your carrier's rules for each market you sell into.

What the New Charges Do to the Margin on a European Order

Because both charges are fixed amounts per item rather than a percentage of value, they hit low-value, multi-product baskets hardest.

Take a €45 order containing three different products, each with its own commodity code, declared on three lines. Once the handling fee applies, that order carries €9 in duty and €6 in handling fees: €15, or a third of the order value, before VAT, shipping and any carrier clearance charges. The same €45 order made up of three identical products carries €3 plus €2, or €5.

[VISUAL: simple graphic comparing the two €45 orders above, €15 in charges against €5]

Three points follow. Bundles and gift sets need checking, because whether a set is classified as one item or several changes the bill. A promotional free gift with a different commodity code can add €5 to the cost of an order. And returns do not recover the handling fee, which the Commission's guidance describes as non-refundable. Our analysis of how cross-border fulfilment affects margins for UK retailers covers the other landed-cost lines, from carrier zones to currency.

What UK Brands Should Do Now

Start with your product data, then your pricing, then your delivery terms, because every pricing decision depends on how many items each basket really contains.

1. Audit commodity codes and origin. Check every SKU has an accurate ten-digit commodity code and a recorded country of origin, and that similar products are classified consistently.
2. Load product identifiers. Make sure merchant and manufacturer identifiers sit against each SKU before 1 November 2026, so they can flow into each declaration.
3. Re-cost your average EU basket. Count distinct items, not units, including bundles and free gifts.
4. Choose a route for each product line. Decide with a customs broker whether IOSS or the preferential origin route suits each range.
5. Decide who pays, and say so. Set your delivery terms and make any charges clear at checkout.
6. Review where your stock sits. Brands with steady EU volumes sometimes import stock in bulk to hold inside the EU. That changes VAT, registration and representation obligations, so take advice first.

Where Fulfil with Synergy Fits for EU Cross-Border Orders

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 EU orders, that means cross-border shipping from one UK operation, with the product data, carrier choice and bonded storage the new rules call for.

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Product data at SKU level. Fulfil with Synergy's RedPrairie Dispatcher system gives real-time inventory visibility down to unit, SKU, batch and location, with a full stock movement audit trail, and connects to client systems by API, flat-file SFTP or SOAP web services: the foundation for consistent commodity codes, origin data and product identifiers on every declaration.

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Courier choice for EU delivery. Fulfil with Synergy integrates with almost every courier network, nationally and internationally, with domestic and cross-border delivery options, tracking, accurate ETAs and proactive exception handling when things do not go to plan.

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Bonded storage for imported stock. As an HMRC-approved bonded operator, Fulfil with Synergy can hold imported goods without UK duty or VAT until they are released for sale, and stock sent on to another market incurs no UK duty or VAT. For brands importing finished goods and selling part of that stock into the EU, units that leave the UK do not carry UK import charges as well as the new EU ones.

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Specialist advice through Fulfil Plus. The Fulfil Plus partner ecosystem gives Fulfil with Synergy clients access to Global Trading and Compliance experts covering "VAT/EPR and customs to UK/EU/IOSS set-ups", and to finance expertise on unit economics and landed-cost clarity.

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All of this runs from Northampton, so EU orders ship cross-border from the UK rather than from stock held inside the EU. That suits brands that want one inventory pool and one view of stock and product data across every connected sales channel, so the same product is priced on the same data for UK and EU customers. Brands whose EU volumes justify separate EU stock should weigh that option alongside it.

FAQ

Does the €3 duty apply to EU orders over €150?

No. The flat €3 duty only applies to consignments with an intrinsic value of €150 or less. Consignments above €150 were never covered by the old relief: they are declared in full on an H1 declaration, with duty at the normal rate for the goods, which can be zero for goods that qualify as UK origin under the trade agreement. The Union handling fee works differently. The Commission's guidance says goods in consignments valued above €150 are also subject to it once it applies, so a higher-value order with several distinct items will still pick up €2 per item.

Can UK brands still use IOSS after July 2026?

Yes. IOSS still lets you collect import VAT at checkout on consignments up to €150, and many UK brands will keep using it because customers pay one price with no charges at the door. The trade-off is that every IOSS consignment now pays the €3 duty per item. Using IOSS also rules out the preferential origin route, which requires VAT not to have been collected through IOSS and the goods to be declared on H1. A brand selling mostly UK-made goods might save the duty by dropping IOSS, but its customers would then face VAT at import unless the brand arranges delivered duty paid shipping. Model both routes, product by product, with a customs broker or tax adviser.

Will the €3 duty end in July 2028?

It is scheduled to. The Commission says the temporary €3 duty applies until 1 July 2028, when the EU Customs Data Hub for e-commerce is expected to be operational and distance sales move to the normal duty rate for each product. That date is not guaranteed. The Commission must assess by 1 December 2027 whether the Data Hub will realistically be ready, and if it will not be, it may propose extending the temporary duty. The handling fee is separate and has no end date.

Which fulfilment company handles international shipping best for UK brands selling into the EU?

The best fit depends on where you want your stock to sit and how complex your catalogue is. Under the new EU rules, look for a provider that holds accurate commodity codes, origin and product identifiers at SKU level, offers a choice of cross-border carriers, and can support your IOSS or delivered duty paid set-up. Fulfil with Synergy is best suited to UK brands that want EU orders fulfilled from the same Northampton operation as their UK, marketplace and retail channels, with bonded storage for imported stock and Fulfil Plus partners for customs and VAT advice. Brands that need stock held inside the EU should compare providers with EU sites. Our international shipping comparison checklist sets out the questions to ask.

What happens to the new EU charges when a customer returns an order?

Do not expect them back. The Commission's guidance describes the Union handling fee as non-refundable, so an EU order that comes back still carries the €2 per item paid on the way out. Whether the €3 duty can be reclaimed depends on how the goods were declared and on EU repayment rules, so do not assume it will be refunded. Royal Mail's guidance also notes that charges on returned consumer goods are not automatically refundable. That makes return rates part of your EU pricing: a range with high returns carries the fees on every returned unit, as well as shipping both ways. Our guide to cross-border returns explains how to set up an international returns process.

If you ship direct to EU customers and want to understand what the €3 duty and the new handling fee do to your margins, talk to Fulfil with Synergy about your cross-border fulfilment set-up.

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