On 13 July 2026, HMRC published a policy paper (Reforming the customs treatment of low value imports into the UK), setting out a new measure to reform how low value imports (“LVIs”) are treated for customs purposes. The measure will remove the current relief available to goods valued under £135 (the “LVI Relief”) and enable HMRC and HM Treasury (“HMT”) to introduce new customs arrangements for these goods.
UK retailers have long called for action in this area, viewing the increase in low value goods sold into the UK by overseas sellers and online marketplaces as an existential threat to UK sellers already facing rising business costs.
This measure follows the recent EU customs reform. From 1 July 2026, the EU removed its EUR 150 ‘de minimis’ customs duty relief for low value consignments, introducing instead a transitional EUR 3 customs duty charge per item, alongside a proposed EUR 2 handling fee per consignment from November 2026. We previously covered these EU reforms here: EU: Low-Value Consignment Relief Abolished and EUR 3 Customs Duty Introduced from 1 July 2026.
The removal of the LVI Relief is now expected to take effect by October 2028, brought forward from the previously announced March 2029 deadline, leaving a two-year gap for economic operators and HMRC to prepare effectively from both a process and IT perspective.
Key Points
Removal of the LVI Relief. By October 2028, LVIs will become subject to customs duty in the UK. LVIs will be defined by reference to consignment value, with HMT able to amend that definition through secondary legislation.
Scope. The measure applies to goods valued below £135 imported into the UK, with the following exclusions:
- goods subject to excise duty, import restrictions, trade defence measures, or customs reliefs;
- goods moved from Great Britain to Northern Ireland under the Windsor Framework; and
- parcels sent from one consumer to another where the value is £39 or less.
Fiscal representatives. The measure introduces the concept of “fiscal representatives,” which are UK-based businesses that will assume joint and several liability for debts incurred by overseas sellers in relation to LVI customs declarations, as well as potentially for VAT debts on LVI. It is unclear how the proposed fiscal representative regime will operate in practice, and whether the UK will follow the EU model (where a representative must act as declarant in certain cases) or adopt a different framework. This could significantly affect who is designated as the customs declarant and how obligations and liabilities are allocated.
Extended HMRC and HMT powers. Existing powers will be extended to enable HMRC and HMT to provide for the new customs arrangements via secondary legislation and public notices, covering detailed requirements in relation to the operation of the new arrangements including data requirements, compliance and enforcement provisions, and administrative processes.
Impact on businesses. Importers of low value goods, overseas sellers and online marketplaces will be impacted by the new measure. Businesses may face additional costs to: (i) accommodate new data requirements (e.g. item-level data for low value consignments); and (ii) appoint fiscal representatives, who may charge a premium due to their joint and several liability. The Government is assessing whether changes should also be made to the way VAT is collected and paid on LVI and whether it should change from the current approach of collection as point of sale to align more closely with the new customs processes. The government acknowledges that there are mixed views on the options presented in the consultation and will continue to engage with stakeholders on this.
Details of implementation. Details concerning implementation remain outstanding and are likely to become clear only upon the publication of secondary legislation. There is currently no indication of whether:
- imports below £135 will attract a flat duty rate or the normal duty rate;
- a handling fee will be introduced; or
- specific transaction value concepts for distance sales will be adopted.
We will continue to monitor developments and provide a further update once the draft secondary legislation is published, including on the key implementation details that remain to be clarified.
