UK to Scrap Tax Exemption on Imports Under £135

The UK Treasury has signaled a new round of UK import duty changes, with Chancellor Rachel Reeves reportedly planning to abolish the current import duty waiver for consignments priced below £135. Under the proposal, low-value parcels shipped directly to UK consumers from overseas e-commerce platforms would no longer benefit from the long-standing low-value goods tax exemption. According to Treasury estimates, the reform could generate around £500 million (approximately US$655 million) in additional customs revenue each year and will be set out in the 26 November Budget, followed by a public consultation on the new tariff framework.

Under the existing rules, large retailers importing goods in bulk into the UK are required to pay customs duties at the border. By contrast, UK consumers purchasing low-priced items directly from overseas marketplaces are often able to avoid such charges on individual parcels worth less than £135. Many of the sellers taking advantage of this regime are based in China and other overseas markets. UK fashion retailers such as Next and Associated British Foods, the parent company of Primark, have long urged the government to address what they see as a structural imbalance in competition.

The Treasury argues that the current UK de minimis threshold undermines the competitiveness of domestic businesses and brick-and-mortar retailers, while also creating potential risks around product safety standards. Removing the duty exemption on low-value goods is intended to put local retailers and overseas sellers on a more level playing field, supporting fair competition, sustaining high standards, and contributing to growth and employment in the UK.

Officials also stress that the direct impact on consumer prices is expected to be moderate. At the same time, the move would bring the UK’s approach closer into line with policy directions in the United States and the European Union, both of which are tightening their own low-value import regimes.

In August this year, U.S. President Donald Trump abolished the customs duty exemption for imported goods valued at less than US$800 per item. The European Union is likewise moving ahead with plans to remove the de minimis relief for consignments worth under €150. Against this backdrop, the UK’s decision to review and potentially end its low-value goods tax exemption reflects a broader international trend: advanced economies are recalibrating their UK import duty changes and equivalent regimes to close loopholes, protect domestic retail, and ensure that cross-border sellers compete on more equal terms. For businesses involved in cross-border trade, closely tracking the removal of the UK de minimis threshold and the evolution of low-value goods tax exemption rules will be essential for pricing, compliance, and supply-chain planning in the years ahead.