Right, let's have a frank conversation about something that's going to affect every UK business that imports products from overseas. The £135 threshold — that simplified rule that's made importing small-parcel goods relatively straightforward since Brexit — is being restructured. HMRC has confirmed that the current low-value consignment model will be overhauled, with full changes targeting 2028. If you're running an e-commerce business, importing goods from China or Vietnam, or selling via Amazon or Shopify using overseas stock, this change will directly impact your costs, your customs processes, and your bottom line.
This guide is for UK brand owners, importers, Amazon and Shopify sellers, and anyone who currently benefits from the simplified £135 customs procedures. We'll walk you through exactly what changes, why it matters, and — critically — what you need to start doing now so you're not scrambling when the deadline arrives.
At Epic Sourcing UK, we've guided hundreds of UK businesses through post-Brexit customs changes. What we consistently see is that the businesses that prepare early come out ahead — and those that wait until the last minute pay for it, sometimes literally.
The UK low-value import threshold is the £135 ceiling below which imported goods are subject to simplified customs procedures — specifically, no customs duty is charged, and VAT collection responsibility falls on the seller or marketplace at point of sale rather than being collected at the border by HMRC. From 2028, this simplified system will be restructured, requiring more comprehensive customs declarations and changing how VAT is collected on imported goods regardless of value.
To understand what's changing, you need to understand how the current system actually works — because it's quite different from what most people assume.
Under the current UK Global Tariff, goods with a consignment value of £135 or less are not subject to customs duty at the point of import. If you're importing a batch of phone cases or promotional gifts worth £80, there's no duty charge to pay. The logic was pragmatic: the administrative cost of collecting small amounts of duty on millions of low-value parcels wasn't worth the revenue generated.
This threshold has been in place since 1 January 2021, when the UK's post-Brexit customs regime came into effect via the Customs Declaration Service (CDS). It replaced previous EU-era arrangements and was designed to smooth the transition for UK businesses adjusting to the new customs framework.
The VAT picture is slightly more complicated. Since January 2021, HMRC abolished the old Low Value Consignment Relief (LVCR) — the rule that once exempted goods under £15 from import VAT. Now, all imported goods are subject to UK VAT at 20%, regardless of value. However, for goods under £135, the mechanism for collecting that VAT shifted. Rather than HMRC collecting it at the border, the responsibility was placed on the overseas seller or the online marketplace — Alibaba, Amazon, Etsy, and so on — to collect and remit UK VAT directly to HMRC at the point of sale.
This was a structural change that moved tax collection upstream in the supply chain, placing compliance obligations on platforms like Amazon Marketplace Services and Alibaba rather than individual UK customs officers processing individual parcels at Felixstowe or Southampton Gateway.
The simplified system was designed for the reality of modern e-commerce: millions of individual small parcels flowing into the UK from China, Southeast Asia, the US, and Europe every day. Processing a full customs declaration — with commodity codes, country of origin, proof of value, and duty calculations — for every £20 item from a Chinese seller would be practically unworkable at scale. The £135 threshold was a pragmatic compromise.
The reality, however, is that this system has also created significant competitive distortions. UK-based retailers pay VAT, business rates, National Insurance, and all associated compliance costs. An overseas seller shipping a £130 product directly to a UK consumer via a marketplace pays comparatively little in the same way. That pressure to reform has been building since 2021 — and 2028 is when the government has chosen to address it.
HMRC and the UK government have announced a fundamental restructuring of how low-value imports are treated, with implementation targeted for 2028. The headline change is that the simplified procedures that currently apply to sub-£135 goods will be replaced with a framework requiring more complete customs information for all goods entering the UK, regardless of value.
The most significant operational change is that the streamlined "at point of sale" VAT collection arrangement will be reformed. Going forward, customs declarations will need to contain more complete data — commodity codes, proper valuation, country of origin — for all imported goods. This aligns the UK more closely with the direction the EU took when it removed the €150 VAT threshold for e-commerce imports, ending the competitive advantage that direct-from-Asia shippers have enjoyed over UK-based retailers.
For UK businesses currently importing goods under £135 via simplified procedures, this means ensuring your customs broker or freight forwarder is prepared to submit full declarations. The era of minimal-documentation imports for small-value goods is ending.
For online marketplaces, the reform also reshapes accountability. Under the current system, large platforms like Amazon and Alibaba are responsible for VAT on goods sold through them under £135. The new framework will retain and potentially extend this platform accountability but will require more comprehensive data — making it significantly harder for non-compliant sellers to hide behind platform relationships.
For UK importers who buy directly from Chinese or Vietnamese factories rather than through consumer marketplaces, the practical impact is slightly different but still significant: your customs agent will need full data from you on every single shipment, regardless of value.
HMRC confirmed 2028 as the target implementation date to give businesses sufficient lead time to adjust their systems and processes. This may seem a long way off, but supply chain decisions, ERP integrations, and customs compliance infrastructure all take time to implement properly. Businesses that start preparing now will have a significant advantage over those who leave it to the last minute — and their operations will be smoother when the deadline hits.
Government timelines are subject to change. The EU moved its equivalent threshold abolition faster than initially signalled. UK businesses should treat 2028 as the latest likely date, not a fixed endpoint. Preparing your customs and compliance infrastructure well ahead of the deadline is strongly advisable — and has other benefits in the meantime.
The impact of this change varies significantly depending on how you currently import. Here's an honest breakdown of which types of UK businesses should be most concerned.
If you're running a Shopify or Amazon business where goods ship directly from a Chinese or Vietnamese warehouse to UK customers — known as cross-border e-commerce — this change will fundamentally alter your cost model. Currently, customers might receive goods under £135 without full customs processing costs being factored in. Post-2028, you'll either need to absorb additional compliance costs or reconfigure your supply chain to import goods in bulk into a UK warehouse and fulfil domestically from there.
Dropshipping models that rely on Chinese fulfilment centres sending individual orders under £135 directly to UK consumers will face the most structural disruption. The economic model for many dropshippers has depended — sometimes without the operator fully realising it — on the simplified threshold. Once full customs declarations are required on every parcel, the economics of high-volume, low-value dropshipping from Asia shift considerably.
If you're already importing goods in consolidated sea freight containers arriving at Felixstowe or Southampton, you're most likely already filing full customs declarations. Your customs broker should be submitting commodity codes and duty calculations for every shipment. The impact on your operations will be less dramatic — but you'll still want to review your EORI registration, confirm your commodity codes are correct, and check that your freight forwarder is fully CDS-compliant.
The simplified threshold has been particularly useful for businesses bringing in small trial orders or samples from Chinese factories — often valued under £135 per consignment. Post-2028, even these will require full documentation. For businesses in ongoing product development cycles, this adds administrative overhead to what is currently a low-friction process. The answer isn't to stop sampling — it's to build the documentation process into your standard workflow.
Here's the flip side: UK businesses that stock goods domestically and currently compete with overseas sellers shipping direct to consumers under the simplified threshold will see the competitive playing field level significantly. The cost advantage that Temu, Shein, and similar platforms have had from simplified import procedures will be substantially eroded. For UK-based product brands, that's meaningful.
Here's a direct side-by-side comparison so you can quickly see what's changing and what isn't:
| Factor | Before 2028 (Current) | After 2028 (New Framework) |
|---|---|---|
| Customs duty on goods under £135 | None charged | Full declaration required; duty applies at commodity code rate |
| UK VAT collection method (sub-£135) | Seller/marketplace collects at point of sale | Reformed — border-based or hybrid model |
| Customs declaration required | Simplified / not required for all parcels | Full CDS declaration required for all goods |
| EORI number needed | Required for goods over £135 (and all business imports) | Required for all imports, no exceptions |
| Commodity code required | Simplified data permitted for sub-£135 consignments | 10-digit commodity code required for all goods |
| Compliance burden for UK importers | Lower for sub-£135 shipments | Equal — same requirements for all values |
| Impact on direct-from-China e-commerce | Minimal friction; cost advantage preserved | Significant operational and cost impact |
| Competitive position of UK-stocked products | Disadvantaged vs overseas direct shippers | Level playing field — overseas advantage largely removed |
Whether the 2028 changes affect you significantly or only at the margins, there are several compliance elements you need to have firmly in order. This section explains what each one is and what you need to do about it.
Non-compliance with UK customs requirements can result in goods being held at the border, financial penalties from HMRC, and serious disruption to your supply chain. All UK businesses importing goods commercially need the following in order — regardless of the 2028 changes. The 2028 reform simply removes the simplified exemptions that some businesses have relied on to avoid full compliance. The time to get this right is now.
An EORI (Economic Operator Registration and Identification) number is a unique identifier issued by HMRC that you need to import goods into the UK commercially. If you're importing goods under £135 and relying on a marketplace to handle VAT, you may not have registered for an EORI. That changes in 2028 — and frankly, you should have one now regardless.
Apply via HMRC's website at gov.uk/eori — it's free and usually issued within five to seven working days. If you already have an EORI, verify it's still active and linked to your current trading entity. Post-Brexit, some businesses confused their old EU EORI numbers with their UK ones — they are completely separate registrations.
The UK's Customs Declaration Service is HMRC's digital system for submitting customs declarations. CHIEF, its predecessor, was decommissioned in 2023. All customs declarations in the UK now go through CDS. If you use a customs broker or freight forwarder, they should be submitting via CDS on your behalf — but it's worth confirming they are, and that you understand what's being declared in your name.
Key CDS compliance points for importers: your customs broker needs your EORI, the commodity codes for your goods, the declared value, and country of origin for every shipment. You are legally responsible for the accuracy of customs declarations even when a third party submits them. Keep commercial invoices, packing lists, and bills of lading for at least four years — HMRC can and does audit retrospectively.
Every product imported into the UK needs to be classified under the UK Trade Tariff using a commodity code (typically 10 digits). These codes determine the duty rate, any prohibitions or restrictions, and what licences might be needed. Getting them wrong — whether intentionally or accidentally — can result in underpaid duty, which HMRC can claw back with interest and penalties.
This is where many small businesses slip up. If you're sourcing a product you haven't imported before, check the commodity code carefully using HMRC's Trade Tariff tool at trade-tariff.service.gov.uk. Better yet, ask your customs broker or freight forwarder to confirm it before your first shipment. If you're currently bringing in sub-£135 goods via simplified procedures, you may never have had proper commodity codes assigned — now is the time to fix this.
If you're importing goods for resale in the UK and your turnover exceeds or is expected to exceed the VAT registration threshold (currently £90,000), you must register for VAT. Import VAT (20%) is payable at the point of import unless you have a duty deferment account with HMRC, which allows you to consolidate VAT payments monthly rather than per shipment.
Post-2028 changes to how VAT is collected at the border may particularly affect businesses that have been relying on marketplace VAT collection for sub-£135 goods. If VAT starts being collected at the border rather than at point of sale, you'll need a duty deferment account to avoid paying it shipment-by-shipment in a way that damages your cash flow. Speak to your accountant about setting one up well in advance of 2028.
Customs compliance isn't only about duty and VAT. If you're importing regulated products — electronics, toys, personal protective equipment, cosmetics, machinery, medical devices — you need to ensure they comply with UK product safety regulations. Post-Brexit UK REACH (the UK's chemicals regulation framework) and UKCA marking (the UK equivalent of CE marking for product safety) apply to a wide range of products imported into Great Britain.
A product that clears customs still needs to comply with safety regulations before it can legally be sold. HMRC enforcement increasingly coordinates with Trading Standards and the Office for Product Safety and Standards on this. The 2028 changes — which will require more comprehensive declarations — are likely to increase scrutiny of product safety compliance too, not just duty and VAT.
If you're sourcing from Vietnam, the UK-Vietnam Free Trade Agreement (UKVFTA) allows significantly reduced or zero duty rates on many product categories — provided goods meet rules of origin requirements. This means documenting that the goods genuinely originate in Vietnam rather than simply being assembled there from components sourced elsewhere.
Post-2028, with more comprehensive declarations required, UKVFTA origin documentation will become more important and more scrutinised. Make sure your Vietnamese supplier can provide proper origin certificates or Statements on Origin. This requires a conversation with them now, not in 2027 — because not all factories are set up to provide it correctly.
The honest answer is: for most established UK importers already using sea freight and a proper customs broker, the direct cost impact is manageable. But for businesses that have been using simplified small-parcel procedures, the change is more significant. Let's break it down.
Once the simplified threshold is removed, every import — regardless of value — will require a full customs declaration. Here's what that means in cost terms:
| Cost Component | Current (Pre-2028) | Post-2028 Estimate | Notes |
|---|---|---|---|
| Customs declaration (per consignment) | Simplified or none under £135 | £25–£75 per declaration (broker fee) | Varies by broker and shipment complexity |
| Import VAT (20%) | Collected at POS by marketplace for sub-£135 | Collected at border for all goods | Cash flow impact unless deferment account held |
| Customs duty (China-origin goods) | None under £135 | 0–12% depending on commodity code | Check your codes now at trade-tariff.service.gov.uk |
| Customs duty (Vietnam-origin, UKVFTA) | None under £135 | 0% to significantly reduced with UKVFTA | Origin certificate required from supplier |
| Annual compliance overhead | Low for sub-£135 importers | £500–£2,500+ depending on import volume | Broker fees, EORI admin, record-keeping |
One of the most practical responses to the 2028 changes is to consolidate your import activity. Rather than placing frequent small orders that rely on simplified procedures, businesses should look at placing larger, consolidated sea freight orders. A single 20-foot container arriving at Felixstowe requires one customs declaration, regardless of whether it contains £5,000 or £150,000 worth of goods. The per-unit compliance cost drops dramatically at scale.
At Epic Sourcing UK, we've been advising clients on this approach for years — the economics of importing generally favour consolidation, and the 2028 changes make the case even stronger. Businesses currently placing multiple sub-£135 orders per month should model the landed cost of a single quarterly sea freight order instead.
Here's where the 2028 changes can actually work in your favour: if you currently source from China and pay meaningful duty rates, switching some or all of your sourcing to Vietnam — where UKVFTA rates are significantly lower or zero — can more than offset the new compliance costs.
Under UKVFTA, 65% of tariff lines had duties eliminated immediately when the agreement came into force, with 99.2% elimination phased in over time. For a UK business importing £200,000 of textiles or apparel from China at an average 12% duty, the annual saving from qualifying Vietnam supply could be substantial. That's a conversation worth having with your sourcing partner well before 2028 — both to capture the saving and to allow time for supplier qualification.
Before 2028 arrives, run a full landed cost analysis on your most important imported product lines. Include: product cost, sea freight to Felixstowe or Southampton, insurance, UK customs duty at your commodity code rate, import VAT, port handling charges, and delivery to your warehouse or 3PL. The businesses that know their real landed costs are the ones that price correctly, stay profitable, and aren't caught out by sudden margin compression when the rules change.
Knowing about the change is only half the battle. This is the most practical section of this guide — here's what you should actually do, and when.
Start by mapping exactly how your goods currently enter the UK. Are you using a marketplace that collects VAT at point of sale? Shipping via express courier in small parcels? Or using sea freight with a full customs broker? The answer determines your exposure to the 2028 changes and what you need to prioritise.
Ask your freight forwarder or customs broker directly: "Are any of our current shipments using simplified procedures under the £135 threshold, and how will your processes change in 2028?" A good customs partner will answer this clearly. If they can't, that's a signal to look for a better one.
Every UK business importing goods commercially needs an EORI. Apply at gov.uk/eori if you don't have one — it's free and typically issued within a week. If you do have one, verify it's active and associated with your current registered business entity. This is foundational: you cannot file a customs declaration without it.
Work through your product catalogue and confirm the correct 10-digit commodity code for each item. Use HMRC's Trade Tariff tool or ask your customs broker to confirm. If you've been importing under simplified procedures, you may never have properly assigned commodity codes. Now is the time to fix this — not under pressure in 2027 with six weeks to the deadline.
The 2028 deadline is a good forcing function to review your entire approach to importing. Questions worth asking honestly:
If you're sourcing from Vietnam and want UKVFTA preferential rates, you need proper documentation from your supplier confirming the goods' origin — either an EUR.1 Certificate of Origin or a Supplier's Declaration on a commercial invoice. Start this conversation now. Many smaller Vietnamese factories are not yet set up to provide this documentation correctly, and getting it sorted takes time and persistence.
Run the numbers now, while you have time to respond strategically. If your current pricing model has implicitly assumed simplified customs treatment on sub-£135 goods, you may need to adjust your supplier pricing, retail price, or supply chain structure. Doing this analysis now gives you options. Doing it in late 2027 leaves you with far fewer.
One often-overlooked impact of the 2028 changes is cash flow. If goods are currently having VAT collected at point of sale by a marketplace, you may not be factoring import VAT as a cash flow item for your business. Post-2028, if VAT is collected at the border, you'll pay it when goods arrive and reclaim it on your quarterly VAT return — a potential three-month gap. A duty deferment account with HMRC allows you to consolidate payments monthly rather than per shipment. Speak to your accountant about setting one up well in advance.
Not all customs brokers are equal. Post-2028, with full declarations required on everything, the quality of your customs broker matters more than ever. Review whether your current broker is: filing via CDS (not legacy systems), up to date on UKVFTA origin rules, transparent about their fees, and genuinely proactive about compliance. If the answer to any of those is uncertain, it's worth getting a second opinion before 2028 arrives.
The 2028 import threshold changes don't exist in isolation. They sit alongside a broader shift in global trade that has been accelerating since 2018 — and the combination of factors makes this a genuinely important time to review whether your current sourcing country mix is optimal for your business.
China remains the world's largest manufacturing base and an indispensable sourcing partner for most product categories. UK-China imports stood at approximately £71 billion in the twelve months to March 2025, and no other single sourcing country comes close in terms of scale, product range, and supplier depth. The 2028 changes don't make China sourcing unworkable — but they do remove one of the structural cost advantages that direct-from-China, small-parcel shipments have enjoyed.
For UK businesses importing via sea freight in consolidated loads — the approach Epic Sourcing recommends for established brands — the operational impact of 2028 is limited. You're already filing full declarations. The main consideration is ensuring your commodity codes are correctly assigned and your duty rates are well understood. There's no UK-China free trade agreement, so you're paying standard UK Global Tariff rates, which vary significantly by product category.
Vietnam presents a compelling alternative for UK importers, particularly in textiles, footwear, furniture, electronics assembly, and homewares. The UKVFTA provides meaningful tariff reductions — including zero duty on many categories — giving UK businesses a genuine cost advantage compared to equivalent Chinese-origin goods. UK-Vietnam trade stood at approximately £9.6 billion in 2024 and is growing strongly, as more UK brands discover the combination of competitive factory pricing, UKVFTA duty savings, and strong manufacturing standards.
| Factor | Sourcing from China | Sourcing from Vietnam |
|---|---|---|
| UK import duty | Standard UK Global Tariff — no preferential rate | UKVFTA: 0% to significantly reduced on many categories |
| Textiles/apparel duty saving example | ~12% standard duty on many apparel codes | 0–6% with UKVFTA (with qualifying origin) |
| Sea freight to UK (Felixstowe/Southampton) | ~25–30 days | ~30–35 days (via Singapore or Port Klang) |
| Factory labour costs | Rising — especially in coastal provinces | 30–40% lower than China in many sectors |
| Supplier ecosystem depth | Very deep — virtually every category covered | Growing — strongest in textiles, furniture, electronics |
| MOQ flexibility | Generally flexible; many factories accept small MOQs | Higher MOQs in some categories than equivalent China factories |
| Origin documentation for duty preference | N/A — no UK-China FTA exists | Required — EUR.1 Certificate or Supplier Declaration |
The smart play for most UK importers isn't to abandon China — it's to build a diversified supply chain that combines Chinese manufacturing depth with Vietnamese cost and duty advantages on the right product categories. This China-Plus-One approach is what most major UK brands are quietly implementing, and the 2028 deadline provides a useful forcing function to accelerate that transition.
Qualifying a new factory in Vietnam — finding the right supplier, sampling, QC audits, making first orders — typically takes six to twelve months. If you want to have a Vietnam supply chain in place and generating UKVFTA duty savings before the 2028 changes hit, the time to start is well before 2027. Businesses that have already been through this process with Epic Sourcing's Vietnam team are in a significantly stronger position heading into 2028.
At Epic Sourcing UK, we work with UK brand owners and importers across a wide range of product categories — from homeware and clothing to electronics, health and wellness, and pet products. The 2028 import threshold changes are exactly the kind of structural shift where having an experienced sourcing partner makes a real difference to the outcome.
Here's how our services align with what UK businesses need right now:
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Not necessarily on duty rates themselves — the UK Global Tariff duty rates are set separately from the threshold changes. What changes is that goods under £135 which previously moved through on simplified procedures will now require full customs declarations. If your goods have a 0% duty rate (which many consumer goods do under the UK Global Tariff), your duty bill won't change. If your goods carry a meaningful duty rate — say 12% on apparel — you'll now be paying that even on smaller consignments that currently avoid it. The indirect cost for all importers is the compliance overhead: broker fees, more detailed paperwork, and potentially VAT cash flow timing. The businesses most exposed are those who have been relying on simplified procedures to import sub-£135 goods without full declarations.
This is where the biggest disruption lies. Businesses operating a cross-border e-commerce model — where goods are shipped directly from a Chinese or Vietnamese warehouse to UK consumers in small parcels under £135 — will face the most significant restructuring. The simplified VAT collection at point-of-sale model will be reformed, meaning each parcel will require more comprehensive customs treatment. The economics of sending large volumes of individual low-value parcels from Asian warehouses to UK doorsteps will change materially. The most resilient response is a transition to UK-based warehousing: import in bulk via sea freight, clear customs once at Felixstowe or Southampton, and fulfil from UK stock. This typically also improves delivery speed for your customers — a further competitive advantage.
For Amazon FBA sellers who import goods into UK fulfilment centres — the standard FBA model — the impact is considerably less dramatic than for cross-border dropshippers. If you're shipping a container to Amazon's UK fulfilment network, you're already going through full customs clearance. Your customs broker files a declaration, duty and VAT are assessed, and your goods are released. The 2028 changes won't add much to that process if it's already well managed. Where Amazon FBA sellers should be more attentive is in ensuring their commodity codes are correctly assigned, and in reviewing whether Vietnam sourcing under UKVFTA could reduce their duty liability — freeing up margin that can be reinvested in advertising or lower pricing.
The UK-Vietnam Free Trade Agreement (UKVFTA) is a bilateral trade deal providing preferential — including zero — tariff rates on a wide range of goods originating in Vietnam. For UK importers, this means goods sourced from Vietnamese manufacturers can attract significantly lower duty rates than equivalent goods from China, which is not covered by any UK free trade agreement. Post-2028, when full customs declarations are required on all imports, having correct origin documentation from your Vietnamese supplier — an EUR.1 Certificate of Origin or a Supplier Declaration — allows you to claim the preferential rate on every shipment. UK-Vietnam trade stood at approximately £9.6 billion in 2024 and is growing strongly as more UK brands discover the opportunity. At scale, the duty savings from a UKVFTA-qualifying supply chain can be substantial, and they go a long way toward absorbing the incremental compliance costs that 2028 brings.
The honest answer is: now, in 2026. Not because the deadline is immediately upon you, but because the most impactful changes — restructuring your supply chain, qualifying new suppliers, building UK stock holdings, switching freight models — all take twelve to twenty-four months to implement properly. Businesses that wait until late 2027 will be making rushed decisions under time pressure, which almost always produces worse outcomes. There's also a practical point: 2028 will be a very busy period for freight forwarders and customs brokers as the entire industry adjusts. Early movers will get better attention and more experienced service. The businesses investing in supply chain preparation now are the ones that will find 2028 to be a manageable transition rather than a crisis.
The 2028 changes are coming. The businesses that prepare now will have lower costs, less disruption, and a genuine competitive edge over those that don't.
At Epic Sourcing UK, we've guided hundreds of UK businesses through supply chain challenges exactly like this one. Book a free consultation — we'll give you a straight answer on what you need to do and when.
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