The UK's government plans to abolish duty relief on imports valued at £135 or less by March 2029, according to recently announced changes. This significant shift in customs treatment is expected to impact approximately 150 million low-value shipments a year, resulting in an estimated annual revenue increase of around £2 billion for HM Revenue and Customs. The move is the culmination of a consultation process that drew to a close on 6 March 2026.
The Treasury launched this consultation in May 2025, seeking views from stakeholders on various aspects of the proposed system, including data collection, tariff application, and potential administrative fees for low-value imports. Additionally, discussions centred around adjustments to VAT collection methods; however, it's worth noting that VAT has already been applied to these goods since reforms introduced in 2021.
At present, goods entering the UK with a value of £135 or less qualify for customs duty relief. The Chancellor's announcement at Autumn Budget 2025 signalled the government's intention to revoke this concession. This change aims to modernise the customs framework and accommodate the rising volume of low-value parcels entering the country.
The consultation process involved engaging with stakeholders through a launch webinar held on 4 December 2025, where HM Treasury and HM Revenue and Customs officials outlined the purpose and scope of the proposed changes. Feedback gathered from this consultation will inform the final design of the new arrangements, including necessary legislative amendments and updated guidance.
The government's response to the consultation is expected to outline stakeholder feedback and confirm definitive decisions regarding the new customs arrangements, tariff treatment, any additional fees, and VAT collection under the revised system. The aim of these reforms is to create a more robust and efficient customs process for low-value goods, reflecting the growth in online shopping and international deliveries.