While the broad direction of travel is now clearer, several important questions remain for businesses selling goods into the UK market:
For many businesses, the abolition of the UK's £135 low-value import relief may appear to be a relatively technical customs change. However, it signals a fundamental shift in how low-value goods will be taxed, reported and managed. Organisations that focus solely on the duty impact risk overlooking a much bigger challenge: the growing importance of customs data, marketplace accountability and technology-enabled compliance in cross-border e-commerce.
In an update published on 13 July 2026, the Government confirmed that the £135 de minimis will be abolished and replaced with a new mandatory customs framework for low-value imports, with implementation expected by October 2028 or earlier.
While the abolition of the £135 relief has attracted much of the attention, several other aspects of the reform may prove equally significant for businesses selling goods into the UK.
1. The new LVI regime will be mandatory for eligible consignments
This is not simply a new simplification. The Government intends eligible consignments valued at £135 or less to use the new LVI arrangements as the default position, subject to a limited number of exclusions.
2. Exclusions from the new LVI regime
Some exclusions will be familiar to businesses already using the current BIRDS arrangements. Goods subject to excise duty and goods requiring licences or other import restrictions will continue to fall outside the LVI regime.
However, the Government has also indicated that the following categories may be excluded from the new LVI arrangements and required to follow standard import customs procedures:
- Goods subject to non-ad valorem tariff rates
- Goods subject to trade defence measures (for example, anti-dumping duties or quotas)
- Goods for which customs relief, tariff suspension or customs special procedures are claimed
For businesses importing affected products, the key question may not simply be whether a consignment is worth less than £135, but whether the goods themselves are eligible to use the new regime.
Interestingly, non-commercial consignments valued under £39 will continue to be eligible for relief.
3. The responsibility for customs duty is moving upstream
Rather than collecting duty at the border, as is the case for standard imports, the Government plans to make sellers, or online marketplaces where they facilitate the sale, responsible for customs duty on qualifying low-value imports. This reflects the wider shift towards collecting taxes closer to the point of sale and places greater emphasis on accurate product and customs data within e-commerce systems. Sellers and online marketplaces without a UK presence will be expected to appoint fiscal representatives and duty may be collected on a quarterly basis.
4. This is as much a data reform as a customs duty reform
The Government has rejected simplified tariff "buckets", meaning businesses will need to classify goods under the UK Global Tariff and apply the appropriate duty rate.
At the same time, sellers and online marketplaces will be responsible for providing item-level data to HMRC, supported by a new consignment reference number model (though, at this stage, it is not envisaged that data already shared in the safety and security declaration will need to be duplicated in the LVI arrangements).
The implication is clear: robust classification, origin and product data will be critical to compliance and may become just as important as the duty itself.
5. The £135 threshold may not be permanent
One point that particularly stands out from the draft legislation is that it does not simply hardwire today's £135 threshold into law. Instead, it creates a framework for low-value goods and allows the Government to amend the threshold through future regulations. Businesses should therefore view £135 as the starting point for the new regime, rather than necessarily the permanent position.
1. The new LVI regime will be mandatory for eligible consignments
This is not simply a new simplification. The Government intends eligible consignments valued at £135 or less to use the new LVI arrangements as the default position, subject to a limited number of exclusions.
2. Exclusions from the new LVI regime
Some exclusions will be familiar to businesses already using the current BIRDS arrangements. Goods subject to excise duty and goods requiring licences or other import restrictions will continue to fall outside the LVI regime.
However, the Government has also indicated that the following categories may be excluded from the new LVI arrangements and required to follow standard import customs procedures:
- Goods subject to non-ad valorem tariff rates
- Goods subject to trade defence measures (for example, anti-dumping duties or quotas)
- Goods for which customs relief, tariff suspension or customs special procedures are claimed
For businesses importing affected products, the key question may not simply be whether a consignment is worth less than £135, but whether the goods themselves are eligible to use the new regime.
Interestingly, non-commercial consignments valued under £39 will continue to be eligible for relief.
3. The responsibility for customs duty is moving upstream
Rather than collecting duty at the border, as is the case for standard imports, the Government plans to make sellers, or online marketplaces where they facilitate the sale, responsible for customs duty on qualifying low-value imports. This reflects the wider shift towards collecting taxes closer to the point of sale and places greater emphasis on accurate product and customs data within e-commerce systems. Sellers and online marketplaces without a UK presence will be expected to appoint fiscal representatives and duty may be collected on a quarterly basis.
4. This is as much a data reform as a customs duty reform
The Government has rejected simplified tariff "buckets", meaning businesses will need to classify goods under the UK Global Tariff and apply the appropriate duty rate.
At the same time, sellers and online marketplaces will be responsible for providing item-level data to HMRC, supported by a new consignment reference number model (though, at this stage, it is not envisaged that data already shared in the safety and security declaration will need to be duplicated in the LVI arrangements).
The implication is clear: robust classification, origin and product data will be critical to compliance and may become just as important as the duty itself.
5. The £135 threshold may not be permanent
One point that particularly stands out from the draft legislation is that it does not simply hardwire today's £135 threshold into law. Instead, it creates a framework for low-value goods and allows the Government to amend the threshold through future regulations. Businesses should therefore view £135 as the starting point for the new regime, rather than necessarily the permanent position.
What should businesses be thinking about next?
The final design of the regime is still developing, but the changes have the potential to affect business models, operating processes and compliance obligations across the e-commerce sector.
If you would like to discuss what these reforms could mean for your organisation, please feel free to reach out to me or the KPMG team.
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