The UK Government has launched a major reform of the customs treatment of low value imports (LVIs), goods valued at £135 or less. These changes are set to significantly reshape how businesses import lower-value consignments into the UK and aim to modernise border processes, improve fairness, and reduce fraud.
With consultation underway and implementation expected by March 2029, now is the time for importers, e?commerce sellers, marketplaces, and logistics partners to prepare.
At Meachers Global Logistics, we’re here to help you understand what’s changing and what it means for your supply chain.
Why the Government Is Reforming LVI Rules
Low value imports have surged in recent years due to the rapid growth of cross?border e?commerce. HMRC estimates that around 600 million LVI consignments were imported in 2024 alone, equivalent to 1.6 million parcels every day, more than triple the 2021 volume.
This rapid growth has placed pressure on border systems and created competitive imbalances, with overseas sellers often benefiting from customs duty relief that UK-based retailers do not. The government’s goal is to ensure a fairer, more modern, and more digitally efficient customs regime.
Key Changes Proposed Under the Reform
1. Removal of the current £135 customs duty relief
The long-standing relief allowing duty?free import of consignments under £135 will be removed, meaning duty will apply to most LVIs for the first time.
Personal, non-commercial imports may remain exempt.
2. Introduction of simplified, bracketed tariff categories
Instead of thousands of commodity codes, the government is proposing a streamlined tariff structure, grouping products into fewer duty brackets to reduce administrative burden.
3. Sellers and online marketplaces will collect duty and VAT at checkout
Duty and VAT would increasingly be collected at the point of sale, similar to current VAT rules for overseas sellers, which aims to simplify border processing and reduce delays.
Overseas sellers without a UK presence will be required to appoint a fiscal representative who is jointly liable for payments.
4. Enhanced data requirements for customs declarations
More detailed electronic data will be required to ensure accurate risk assessment and border compliance. This aligns with the government’s focus on digitalisation and automation.
5. Potential new administrative border fees
The government is considering additional fees to cover the cost of border checks associated with LVI imports.
Implications for UK Importers and Online Retailers
- Higher costs – Most LVI consignments will become subject to customs duty and potentially new admin fees, likely increasing overall import costs.
- More complex compliance requirements – New data fields and revised tariff structures may require system upgrades or process changes for businesses and customs intermediaries.
- Possible operational delays – During the transition to the new system, importers reliant on fast, low-cost parcel flows may experience slower processing times.
- Levelled playing field for UK retailers – UK-based retailers, who already pay duties and higher compliance costs, may benefit from fairer competition against overseas direct?to?consumer sellers.
What Should You Do Now?
- Identify all imports under £135 and assess how new duties would affect landed costs.
- Review your supply chain contracts to clarify who will be responsible for duty payments, seller, marketplace, or representative.
- Upgrade customs and e?commerce systems to handle expanded data requirements.
- Engage with the consultation to share your industry perspective before 6 March 2026.
Stay Ahead of the Changes
As the UK trade environment continues to evolve, changes in customs policy can have wide?ranging effects on logistics, border processes, and cross?border supply chains. At Meachers Global Logistics, we remain committed to keeping our customers informed and supported through any shifts in the regulatory landscape. If you’d like guidance on how upcoming customs developments may influence your operations, our specialists are always here to help.
