UK Low Value Imports 2029 — The £135 Customs Duty Change

The UK government is removing the customs duty relief for low value imports worth £135 or less. The Budget 2025 announcement said the change would apply from March 2029 at the latest, and the July 2026 HMRC policy paper confirms that the relief will be removed and replaced with new low value import customs arrangements.

This is a customs-duty reform, not a simple new VAT threshold. Import VAT is already due on goods imported into the UK under the post-2021 rules. The future change concerns the customs duty relief and the way low value consignments are declared, paid for and controlled.

The final tariff rates, any administration fee, the detailed VAT process and the operational guidance are not all published yet. A shopper, seller or marketplace should therefore treat the policy as confirmed in direction and scope, but should not invent a future parcel surcharge from the £135 headline alone.

For related online-selling VAT questions, read the online marketplace VAT liability guide and the UK VAT registration guide. This page focuses on customs treatment of low value imports.

What is changing?

Currently, a low value import can claim customs duty relief when the consignment is worth £135 or less, although VAT may still be due. The government intends to remove that relief so that qualifying low value imports are subject to customs duty in the same broad policy direction as goods imported in bulk by high-street businesses.

The future system will use a new set of low value import customs arrangements rather than simply forcing every parcel through the same declaration route as a large commercial shipment. HMRC and HM Treasury say the design is intended to handle high parcel volumes while collecting more data and applying a more consistent tariff treatment.

Who is affected?

The policy material identifies several groups:

• UK consumers, who may see customs duty incorporated into a seller's price, collected at checkout or handled through the delivery chain;
• overseas sellers, who may need to use the new arrangements or work through another responsible party;
• online marketplaces, particularly where they facilitate the sale and movement of the goods into the UK;
• parcel operators and customs intermediaries, which may submit data or declarations on behalf of sellers; and
• UK businesses, which may need to review landed cost, import records, product classification and customer communications.

The final commercial effect depends on who is responsible for the declaration and payment, how the marketplace contract allocates the cost and what tariff applies to the goods. A UK consumer should not assume that the person paying HMRC will always be the person who visibly charges the consumer.

How is a low value import defined?

The new arrangements are designed around an individual consignment sent by a business from outside the UK to a UK business or consumer, with a value of £135 or less. The consultation outcome and policy paper describe the value as a consignment boundary, not as a per-item allowance that can be multiplied without regard to the shipment.

The published policy material says some goods at or below £135 will be excluded from using the new low value arrangements and will instead use standard import customs arrangements. The identified exclusions include:

• goods above £135;
• goods subject to non-ad-valorem tariff rates, such as a duty based on quantity rather than value;
• goods subject to an import restriction or licence requirement;
• goods subject to excise duty; and
• goods subject to trade-defence measures.

If a seller combines multiple items into one consignment, the classification and value treatment can change. Do not treat each product listing as a separate customs consignment without checking the actual movement, seller and parcel structure.

What happens to the £135 customs duty relief?

The published policy is to remove the relief from the UK customs tariff. Once the change is operative, a qualifying low value import will no longer receive the current blanket customs-duty treatment merely because its value is £135 or less.

That does not mean that every £100 parcel will attract the same percentage. Customs duty is normally affected by the goods' classification, origin, applicable trade preference, relief, suspension or special procedure. The policy paper says sellers and marketplaces may still need to use standard arrangements when claiming a preferential rate, customs relief, tariff suspension or quota.

Until the relevant tariff and secondary legislation are published, the safe planning statement is:

1. the existing £135 customs duty relief is being removed;
2. low value imports will move into a new customs framework;
3. the goods' classification and origin will still matter; and
4. the final duty and administration cost cannot be inferred from the parcel value alone.

Who will pay the customs duty?

The consultation outcome says sellers, and online marketplaces where they facilitate the sale, are expected to be responsible for payment of customs duty under the new low value import arrangements. The government expects relevant sellers or marketplace operators to register for the arrangements, subject to the final rules.

The policy also introduces the concept of a fiscal representative. This is a UK-based business that can assume joint and several liability for customs debts incurred by an overseas seller in connection with low value import declarations. The fiscal representative may also take on additional responsibilities, but the final commercial contract and regulations matter.

For businesses, this makes customs responsibility a contractual and compliance question, not only a tax-rate question. Review:

• who is importer or declarant of record;
• who submits the low value data;
• who pays HMRC;
• who bears a later customs debt or correction;
• whether a UK fiscal representative is required or commercially useful; and
• how refunds, returns, origin evidence and product classification are handled.

What happens to VAT?

Import VAT is already due on goods imported into the UK under the current post-2021 framework. The low value import consultation considers whether VAT collection processes should change alongside customs arrangements, but the published material does not create one final future VAT method for every shipment.

The government says alignment between customs and VAT could help the system work more consistently, especially for business-to-consumer imports. It has also distinguished B2B and B2C treatment in the consultation. A seller should not tell customers that the £135 reform is “new VAT” without checking the final VAT rules.

The customs-duty reform and online-marketplace VAT liability are related but separate. VAT registration, marketplace liability, import VAT and customs duty can apply through different legal routes.

What about gifts from private individuals?

The new arrangements are aimed mainly at low value imports sent by a business. The consultation material says the new low value import arrangements will not apply to goods sent from one private individual to another private individual or business in the same way.

The government intends to retain the existing relief for non-commercial consignments sent from one private individual to another, valued at £39 or less, so that qualifying gifts from overseas friends and family can continue to receive the relevant relief from customs duty and import VAT.

The £39 gift rule is not a general online-shopping allowance. A purchase from a business, a commercial shipment or a parcel that does not meet the gift conditions must not be labelled as a private gift to avoid the customs rules.

What is still not final?

The July 2026 policy paper and consultation outcome give a much clearer framework, but several operational points remain dependent on regulations, notices and guidance:

• the exact operative date, which the policy paper says will be appointed by regulations by October 2028 at the latest;
• tariff rates and treatment by product classification;
• any additional administration fee;
• the final data set and registration process;
• the detailed fiscal-representative rules;
• the VAT collection interaction;
• customs valuation and correction procedures; and
• marketplace and parcel-operator implementation.

The Budget headline says March 2029 at the latest, while the policy paper provides a legal backstop for the operative date. Use the later official regulations and HMRC notices when planning a live implementation.

What should sellers and marketplaces prepare?

Businesses selling into the UK can start with data and responsibility rather than guessing a future tariff:

Do not change current checkout or customs coding solely from this article. The implementation rules must be available before a business hard-codes a duty rate, fee, importer role or customer message.

Frequently Asked Questions

For related seller obligations, read the online marketplace VAT liability guide. Before changing customs processes, check HMRC's published low value import policy and the final regulations and guidance issued before implementation.

Official sources

• HMRC: Reforming the customs treatment of low-value imports
• HM Treasury: Consultation outcome for low-value imports
• HM Treasury: Budget 2025
• HMRC: Draft legislation for low-value imports
• GOV.UK: Import VAT and customs duty on gifts

These HMRC, HM Treasury and GOV.UK publications are the official references for the proposed customs treatment, consultation, draft legislation and gift rules. Distinguish proposals from final law before changing a process.