Autumn Budget 2025: Customs Tax

In Autumn Budget 2025 it was announced that the UK will remove Customs Duty relief on Low Value Imports (LVI) which means that commercial goods below the value of £135 imported into the UK will be charged Customs Duty by March 2029 or earlier.

The Government has released a consultation paper which sets out what the new arrangements for LVI will likely look like but is also inviting businesses to have their say.

What we know so far:

• Removal of LVI relief: The Government has announced its plans to remove the current relief of Customs Duty for LVIs, making all commercial imports potentially subject to Customs Duty;
• Data requirements: HMRC will collect item level data on LVIs. Sellers and operators of online marketplaces will be responsible for submitting this data, which includes goods descriptions and customs values; and
• Fiscal representative: Non-UK-established sellers and operators of online marketplaces who previously sold goods into the UK below the £135 threshold will now be required to appoint a fiscal representative in the UK.

What could happen:

• Simplified duty rates: Introduction of optional simplified rates to reduce the administrative burden. This schedule could condense UK Tariff codes into goods description buckets;
• Additional fees: There is likely to be a fee on LVIs to cover administrative costs associated with the new customs arrangements. This fee would be charged to sellers or operators of online marketplaces; and
• VAT: The Government is considering integrating the collection of VAT within the new LVI customs arrangements, allowing importers to pay both Customs Duty and Import VAT via a new single registration.

HMRC have announced they will maintain tariff-free imports until 31 December 2026 to avoid unnecessary costs for businesses while a review of possible further extensions takes place. On Wednesday 26 November 2025, HMRC opened the next application window for businesses to apply for new suspensions.

The deadline by which to submit applications is 11:59 pm on Wednesday 4 February 2026.