What Is the UK £135 Low-Value Import Exemption?
Under current UK rules, imported goods with a declared value of £135 or less are exempt from import duty. VAT is instead collected by the online marketplace at checkout, so buyers pay a tax-inclusive price and no extra VAT is due at customs.
This rule is similar to the EU's IOSS system and has greatly simplified clearance for small cross-border direct-mail parcels — no full import declaration required, and zero duty cost. At its peak, hundreds of millions of low-value parcels entered the UK each year through this channel, a large share from Chinese e-commerce platforms.
Policy Timeline: From Announcement to Implementation
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Jun23 June 2026UK government first announces plan to remove the exemption
HM Treasury announced, in a supplementary document to the 2026 spring fiscal statement, its plan to remove the £135 low-value import duty exemption, aiming to "rebalance the competitive environment between imported and domestic goods."
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Jul13 July 2026GOV.UK publishes formal reform consultation document
HMRC and HM Treasury jointly published a "Low-Value Import Reform" consultation document on GOV.UK, confirming the direction of removing the £135 exemption and opening the proposal to industry feedback through September 2026.
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20272027 (estimated)Consultation results published & draft legislation
The government is expected to publish consultation results in 2027 and introduce a draft Customs and VAT (Import Amendment) Bill, formally beginning the legislative process. The exact timeline depends on parliamentary scheduling.
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2028October 2028 (effective at the latest)Policy takes effect: £135 exemption removed
The duty exemption for imports valued at £135 or below is formally abolished. All imported parcels, regardless of value, will be subject to import duty based on HS code, plus 20% VAT (the VAT collection mechanism may be retained, but the duty exemption is removed).
Impact on Cross-Border E-commerce Sellers
Once removed, the low-price direct-from-China-to-UK model will need a full rebuild — but there are also differentiating opportunities for well-prepared sellers.
Direct Hits
- Every order will require a full customs declaration, extending clearance time
- Duty costs on low-price goods jump sharply (clothing ~12%, accessories ~0–3.5%)
- Under DAP, buyers receive an HMRC duty notice — refusal rates rise
- Pricing competitiveness comes under pressure, margins narrow
- Platform low-price direct-mail models take a direct hit
Operational Pressure
- Stricter declaration requirements (accurate HS codes required)
- Higher risk from under-declared value — seizure and fines if caught
- More working capital tied up in UK local warehouse stock
- VAT registration requirements unchanged, but duty handling is now added
Structural Opportunities
- Sellers already using UK local warehouses gain a clear edge
- DDP-compliant sellers are more trusted by buyers
- High-price, high-margin categories absorb duty costs more easily
- The gap between compliant sellers and low-price arbitrageurs widens
Impact by Sales Model / Platform
| Model / Platform | Previous Reliance on £135 Exemption | Expected Impact |
|---|---|---|
| China direct-mail low-price goods (<£135) | Extreme reliance | Duty costs stack up, pricing competitiveness drops sharply |
| Temu/Shein-style direct-mail model | High reliance | Must re-evaluate direct-mail vs UK local warehouse costs |
| Amazon FBA (shipped from UK warehouse) | Low | Inbound freight may be affected; FBA itself is unaffected |
| DTC / independent store (already DDP) | Low | Minimal impact; duty already built into pricing |
| UK local warehouse fulfilment | None | Unaffected; competitive position improves |
Impact on UK Individual Buyers
For consumers, the most direct change is that the era of duty-free cheap goods from China will end in 2028. How much you feel it depends on which shipping model the seller uses.
✅ DDP — Duties Pre-paid (seamless for buyer)
- Seller or carrier pre-pays duty and VAT
- Product prices may be slightly higher
- No extra payment required on delivery
- Smooth clearance, normal delivery
- Shopping experience largely unchanged
⚠️ DAP — Buyer Pays Tax on Arrival
- Parcel held by UK customs on arrival
- Buyer receives an HMRC duty notice
- Must pay within the specified period to receive the parcel
- Unpaid parcels are returned or destroyed
- Poor experience; high refusal rate
How Duty Is Calculated: Real Examples
Once removed, all imported goods will be subject to import duty based on HS code, plus 20% VAT. Reference rates and estimates for common categories:
Estimated Duty by Category (Courier Channel)
| Product Category | Example Declared Value | Reference Duty Rate | Estimated Duty | VAT (20%) | Total Extra Tax |
|---|---|---|---|---|---|
| Clothing (T-shirts, jackets) | £25 | ~12% | ~£3 | ~£5.6 | ~£8.6 |
| Footwear | £40 | ~3.7–12% | ~£1.5–£4.8 | ~£8.8 | ~£10–£14 |
| Phone / electronics accessories | £30 | ~0–3.5% | ~£0–£1.1 | ~£6.2 | ~£6–£7 |
| Small home goods | £20 | ~3–6.5% | ~£0.6–£1.3 | ~£4.3 | ~£5–£6 |
| Toys / children's products | £15 | ~0–4.7% | ~£0–£0.7 | ~£3.1 | ~£3–£4 |
* Actual rates depend on HS classification and current HMRC tariff schedules. VAT is calculated on (declared value + shipping + duty); the table above is a simplified estimate. The zero-rate VAT exemption for clothing applies only to children's clothing — adult clothing is subject to 20% VAT.
The Solution: DDP Duty-Paid Shipping
Once the policy takes effect, the most direct and practical response is DDP (Delivered Duty Paid) shipping — duty and VAT are pre-paid by the carrier, and the recipient signs for the parcel with no extra payment.
DDP vs DAP: The Core Difference
✅ DDP — Duty-Paid Delivery (Recommended)
- Carrier/seller pre-pays UK duty + VAT before dispatch
- Recipient signs with no extra payment
- Clearance handled by a specialist team — efficient
- Tax cost is transparent and can be built into pricing
- Return and refusal rates significantly lower than DAP
- Best fit for most B2C cross-border e-commerce scenarios
⚠️ DAP — Buyer Pays at Destination
- Duty is paid by the recipient in the UK
- Buyer may receive an unexpected HMRC duty notice
- Complex payment process often leads to abandoned parcels
- Storage charges accrue while the parcel is held
- Not suitable for consumer-facing retail shipments
JunFeng DDP UK Line — Prepare Early and Get Ahead
JunFeng's main UK express channels already operate on a DDP basis, with duty and VAT included in the all-in freight quote:
- Full declaration support: We help provide accurate HS codes and product descriptions to reduce inspection risk
- Transparent duty estimates: Tax cost is communicated before dispatch so it can be factored into pricing
- Specialist clearance team: We monitor HMRC clearance status throughout and handle exceptions promptly
- Seamless last-mile delivery: Once cleared, local delivery follows immediately — no impact on the recipient's experience
- Get ahead of the deadline: Switch to DDP before the new rules take effect, and avoid scrambling to react in 2028
Frequently Asked Questions
Common questions about the UK's removal of the £135 low-value import exemption
The UK government announced the plan on 23 June 2026, published a formal reform consultation document on GOV.UK on 13 July 2026, and the change will take effect by October 2028 at the latest. Until then, goods valued at £135 or below continue to be handled under current rules (duty-free, VAT collected by the platform).
Yes. Current rules — duty-free below £135 — still apply until the policy formally takes effect. However, sellers are advised to start evaluating a switch to DDP duty-paid shipping now, since preparing during the transition period is far easier than reacting after the new rules take effect.
Once removed, all imported goods regardless of value will be subject to import duty (by HS code — roughly 12% for clothing, 0–3.5% for electronics accessories) and 20% VAT. Example: a T-shirt declared at £25 would incur roughly £3 duty + £5.6 VAT = about £8.6 in extra tax.
They are separate but usually handled together in practice. Import duty is charged by HS code rate; VAT is calculated on (declared value + shipping + duty) at 20%. Under current rules, VAT on goods below £135 is collected by the marketplace; after the reform, the duty exemption is removed and the VAT collection mechanism may continue, but duty becomes payable in addition.
DDP (Delivered Duty Paid): the shipper or carrier pre-pays the destination country's import duty and VAT, so the recipient pays nothing extra on delivery. DAP (Delivered at Place): the recipient pays tax at destination — UK recipients receive an HMRC duty notice and must pay before the parcel is released, which is a poor experience with a high return rate.
Yes. JunFeng's main UK express channels operate on a DDP basis, with duty and VAT already included in the all-in freight quote. Sellers can estimate the tax cost before dispatch, and recipients pay nothing extra on delivery.
Once the new rules take effect in October 2028, all imported parcels will be subject to import duty and 20% VAT, with no £135 duty-free threshold. If the seller ships DDP, you pay nothing extra on delivery; if DAP, you will receive an HMRC duty notice and must pay within the specified period to receive your parcel. Choose sellers or carriers that already offer DDP shipping.
