Right, let's have an honest conversation that most sourcing websites are dancing around.
The UK's £135 low-value import relief — the rule that has let hundreds of millions of cheap parcels from China arrive at British warehouses and doorsteps without paying customs duty — is being reformed. The changes are already beginning, with more to come through to 2028. If you're a UK importer, a brand owner, or anyone who buys stock from overseas, this directly affects your landed cost calculations, your customs obligations, and your competitive position.
This guide is for UK businesses who import goods under £135 per parcel, sell B2C products sourced from China or Vietnam, operate on Amazon or other marketplaces, or who simply want to understand what HMRC's changing approach to low-value consignments means in practice. We'll also look at what the end of cheap-parcel economics means for brands who do things the right way — because the competitive playing field is shifting in your favour.
At Epic Sourcing, we work with UK brands and importers navigating exactly this landscape every day. Here's what you need to know.
The £135 low-value import relief (also called the de minimis threshold) is a UK customs rule that exempts commercial goods valued at £135 or below from import customs duty at the border. Instead of paying duty on entry, VAT is collected by the seller or online marketplace at the point of sale — a system introduced post-Brexit in January 2021 as part of the UK's new import VAT model.
To understand what's changing, you first need a clear picture of the current system — because it's often misunderstood, even by experienced importers.
When the UK left the EU's customs union, it overhauled how VAT is collected on low-value imports. Before Brexit, goods under £15 from outside the EU could enter completely VAT-free. That was abolished. What replaced it was a two-tier system:
| Consignment Value | Customs Duty | VAT Collection | Import Declaration |
|---|---|---|---|
| £0 – £135 | No duty (exempt) | Seller/marketplace collects VAT at checkout | Simplified (low-value) declaration |
| £135 – £873 | Standard duty rate applies | Import VAT payable at border | Full customs import declaration (C88) |
| £873+ | Full duty + potential anti-dumping | Import VAT payable at border | Full customs import declaration |
The £135 applies to the intrinsic value of goods in a consignment — essentially the goods cost excluding freight and insurance. It applies per consignment (shipment), not per item.
Some overseas sellers have artificially split consignments to stay under the £135 threshold. HMRC considers this practice fraudulent under UK customs law.
The honest answer is that the current system has been exploited at industrial scale. What was designed to reduce administrative burden for genuine low-value trade has become the backbone of a parallel import economy that distorts competition for UK businesses.
By 2024, platforms like Temu, Shein, and AliExpress were processing tens of millions of low-value parcels into the UK each year, many from warehouses in China. Because each parcel came in under £135, no customs duty was collected. For UK brands sourcing responsibly — paying proper duties, holding UK stock, operating EORI numbers and full CDS declarations — this created an impossible cost disadvantage.
In early 2025, the United States effectively suspended its $800 de minimis threshold for goods shipped from China and Hong Kong, citing unfair competition and customs enforcement difficulties. The EU has also been moving to close its €150 equivalent threshold. This created significant political pressure on the UK government to follow suit.
HMRC's own estimates suggested hundreds of millions of pounds in VAT went uncollected annually from this route. Non-compliant sellers undercut UK competitors not just on labour costs, but on tax.
This isn't just a tax story. It's about whether UK businesses can compete on a level playing field. At Epic Sourcing, we've watched UK brand owners work incredibly hard to build compliant, quality-assured supply chains — and then lose sales to sellers who face none of those costs. The reform is overdue.
The government has signalled a phased approach to reforming the low-value consignment relief. Here's the current state of play as of September 2026, and what to plan for through to 2028.
VAT-exempt parcel rule abolished. Sellers required to collect UK VAT on goods ≤£135. Customs duty relief retained for sub-£135 goods.
HMRC begins enforcement actions against non-compliant overseas sellers. Government consultations on reform begin.
US suspends $800 de minimis for China/Hong Kong shipments. Chancellor signals intention to reform the UK threshold.
Reform proposals published. Enhanced due diligence requirements for online marketplaces being introduced. Border Force increasing parcel-level inspection rates. Businesses need to review their supply chain structures now.
Government's stated target for full reform implementation. The exact threshold change will be confirmed in future Autumn Statements and Budget announcements.
The specific dates and threshold changes will be confirmed by HMRC and HM Treasury in future fiscal events. Do not rely on this guide as the final word on dates — consult HMRC's official guidance and your customs broker.
If you run a UK brand that sources products from China or Vietnam and sells them in the UK, your position depends on how you currently operate.
If you're already importing container loads into the UK, paying customs duty, and holding stock at a UK warehouse or 3PL, the changes to the £135 relief are largely positive for you. Your competitors who have been avoiding duty through low-value parcel splitting will face higher costs.
This is where the changes bite hardest. If your business model involves orders being shipped directly from a Chinese supplier to a UK consumer as individual parcels under £135, that model is under direct pressure. You will need to evaluate: switching to a UK-held stock model, using a UK 3PL or Amazon FBA UK, recalculating landed costs with duty included, and potentially adjusting product pricing.
If you're working with a sourcing agent like Epic Sourcing, the impact depends on your current shipping arrangement. A professional sourcing agency will be planning for these changes and can help you restructure your inbound logistics.
| Business Model | Current Exposure | After Reform | Action Required |
|---|---|---|---|
| Bulk importer, UK stock | Low — already fully compliant | Improved competitive position | Review CDS setup; update cost models |
| Dropshipper (DTC from China) | High — model depends on relief | Cost increase of 5–20%+ per unit | Transition to UK stock model urgently |
| Marketplace seller (Amazon/eBay) | Medium — depends on fulfilment | FBA sellers less impacted; MFN at risk | Move to FBA UK or 3PL; review sourcing |
| Wholesale/B2B importer | Low — typically above £135 | Minimal change | Ensure CDS declarations are accurate |
The marketplace sector deserves its own section because the dynamics here are particularly complex — and the outcome for compliant UK sellers is, frankly, quite positive.
Amazon sellers using Fulfilled by Amazon (FBA) with stock already in UK fulfilment centres are largely unaffected by the £135 changes. Sellers using Merchant Fulfilled Network (MFN) who ship directly from China to UK customers are in a very different position — each parcel they ship could attract import duty, adding days to delivery times and significant cost increases.
As part of the UK's reform package, online marketplaces are being given greater legal responsibility to ensure their sellers are collecting and remitting the correct VAT and complying with customs obligations. For UK-based sellers operating legitimate businesses, this is actually good news.
For UK brands that have already invested in compliant supply chains, professional branding, and UK stock, the reform creates a genuine competitive opportunity. As the "cheap parcel" arbitrage closes, your quality-and-compliance advantage becomes a meaningful price and trust differentiator.
Whether or not the £135 threshold changes, if you're importing goods into the UK for commercial purposes, you need to understand the compliance infrastructure.
An Economic Operator Registration and Identification (EORI) number is mandatory for any UK business importing goods commercially. EORI numbers begin with "GB" followed by your VAT number and three additional digits (e.g. GB123456789000). Apply through HMRC's website — it's free and usually issued within 5–7 working days.
As the £135 relief tightens, Border Force will increase spot-checks and hold goods where customs declarations are missing or incorrect. Goods held at Felixstowe or Southampton while you scramble for paperwork means storage charges, delayed stock, and unhappy customers.
HMRC's Customs Declaration Service (CDS) replaced the legacy CHIEF system in November 2023. All customs declarations in the UK must now go through CDS. What CDS means for you: you need a GB EORI number registered on CDS; import declarations are filed electronically; duty and VAT payments are processed through CDS; your customs agent files on your behalf but you remain legally responsible for accuracy.
Every product imported into the UK has a commodity code under the UK Global Tariff. Your commodity code determines your duty rate — look these up on the UK Trade Tariff service at trade-tariff.service.gov.uk. Duty rates typically range from 0% (electronics, most machinery) to 12–20% (clothing and textiles).
VAT-registered UK businesses can reclaim import VAT (currently 20%) through their VAT returns, so for most B2B importers, import VAT is cash-flow neutral over a quarter. A duty deferment account through HMRC allows you to defer payment to the 15th of the month following import — improving cash flow significantly.
UK businesses importing physical products must ensure compliance with UK product safety law. UKCA (UK Conformity Assessed) marking requirements apply to many product categories. CE marking (the EU standard) is generally no longer sufficient for goods placed on the UK market.
Book a free consultation with Epic Sourcing. We'll review your current supply chain structure and help you plan for the changes ahead — at no obligation.
Book Your Free ConsultationWith customs duty becoming a real cost factor rather than an avoided one, the trade agreement you leverage for your supply chain matters more than ever. This is where sourcing from Vietnam — under the UK-Vietnam Free Trade Agreement (UKVFTA) — offers a compelling advantage for many UK importers.
The UKVFTA came into force in January 2021. It provides for significant tariff reductions on goods with sufficient Vietnamese origin content — with 65% of tariff lines going to zero immediately, rising towards 99.2% over the agreement's term.
| Product Category | UK Duty (China, MFN) | UK Duty (Vietnam, UKVFTA) | Saving on £10,000 Shipment |
|---|---|---|---|
| Clothing & Apparel | 12% | 0% (qualifying origin) | £1,200 |
| Footwear | ~8–16% | Reduced/0% (qualifying) | £800–£1,600 |
| Furniture & Homeware | ~0–6.5% | 0% (qualifying) | Up to £650 |
| Electronics | 0% (most categories) | 0% | — |
| Plastic/Rubber Goods | 3–6.5% | 0–3% (qualifying) | Up to £650 |
Note: Duty rates are illustrative based on common commodity codes as of 2026. Always verify your specific commodity code on the UK Trade Tariff service. UKVFTA preferential rates require a valid proof of origin (REX or supplier declaration).
To claim UKVFTA preferential rates, goods must meet the rules of origin — meaning they must be sufficiently "made in Vietnam." Simply buying goods from a Vietnamese supplier doesn't guarantee UKVFTA eligibility if significant Chinese components are incorporated without sufficient transformation in Vietnam. At Epic Sourcing, we work with Vietnamese factories to verify origin compliance before you commit to a supply chain.
Sea freight from Vietnam to UK ports (Felixstowe, Southampton) takes approximately 28–35 days. Vietnam's main container ports at Ho Chi Minh City and Hai Phong serve most UK freight. Lead times from Vietnamese factories typically run 45–90 days including production and transit.
The worst thing you can do right now is wait and see. Here's a practical, phased action plan to protect your business and position it to benefit from the changes ahead.
We work with UK brands and importers every day who are navigating exactly this environment. When the rules change, the businesses that adapt fastest — with the right supply chain, the right compliance foundations, and the right product — win.
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For UK businesses that want to source a quality product from China or Vietnam with their branding applied. We find the factory, verify them, manage quality control, and handle the logistics.
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Already have a supplier but not sure they're legitimate? We verify Chinese and Vietnamese manufacturers — checking their business registration, factory capability, export history, and UKVFTA origin eligibility.
Based in London (71-75 Shelton St, WC2H 9JQ), Epic Sourcing has been helping UK businesses source confidently from China and Vietnam since 2018. We understand UK compliance requirements, UKVFTA origin rules, and the practical realities of shipping through Felixstowe and Southampton.
The changes to the £135 relief primarily affect goods arriving as individual consumer parcels (direct-to-consumer shipping from overseas). If you're importing goods in bulk — by sea freight container or large consolidated shipments — you've almost certainly been paying customs duty already. The biggest impact falls on sellers who have been shipping individual consumer orders directly from China. UK importers who bulk-import and hold UK stock are far less affected, though they will benefit from reduced competition from non-compliant sellers.
Yes, but only if your goods genuinely qualify under the UKVFTA rules of origin. For eligible goods — particularly textiles, clothing, footwear, and some furniture — the duty savings can be substantial, ranging from 8% to 20% of the goods value depending on the product. The key requirement is that goods must have sufficient Vietnamese-origin content. Simply buying goods from a Vietnamese supplier that imports Chinese components and packs them in Vietnam is unlikely to qualify. You need a sourcing partner who can verify origin compliance before you commit to the supply chain.
Yes — an EORI number is mandatory for any UK business importing goods commercially. Without an EORI number, you cannot make a customs declaration, and goods will be held at the border. The EORI number is free to obtain from HMRC and is typically issued within five to seven working days. Even if you use a freight forwarder or customs broker to handle your declarations, the EORI number must be in your name — you remain the importer of record legally responsible for accuracy.
The direct-from-China dropshipping model is under serious pressure. As the duty relief tightens, your options are: (1) Transition to a UK-stock model, buying in bulk and holding inventory at a UK 3PL or Amazon FBA centre; (2) Focus on higher-value, branded products where the margin can absorb duty costs; (3) Explore Vietnam as a sourcing option if your products qualify for UKVFTA duty reductions. We'd recommend booking a free consultation with Epic Sourcing to model out the specific economics for your product category.
As of September 2026, the UK government has not published a single confirmed implementation date for removing or significantly lowering the £135 customs duty threshold. What has been confirmed is that reform is coming — with a timetable through to 2028 — and enforcement of VAT compliance on sub-£135 imports has already been tightened. Our strong advice: treat the reform as already underway and be structurally ready well before 2028. HMRC's official guidance should always be your primary source.
The businesses that adapt early will have a significant advantage over those who scramble at the last minute.
Book a free 30-minute consultation with Epic Sourcing and we'll assess your current position, identify your exposure, and map out a practical path forward.
Epic Sourcing UK · 71-75 Shelton St, London WC2H 9JQ · epicsourcing.co.uk
