The UK's £135 parcel rule is changing. Here’s what British importers and eCommerce sellers must prepare for before the 2029 deadline.
In summary: The UK’s £135 customs duty de minimis threshold — the point below which no import duty is charged on goods imported into the UK — is under reform. The government has signalled plans to lower or abolish this threshold as part of wider UK customs modernisation, with full implementation expected by 2029. For UK importers and eCommerce sellers who source products from China or Vietnam, this means higher costs on small parcels and consignments. Here’s what you need to understand now and how to prepare.
I’ll be honest with you: most British importers I speak to are focused on the next shipment, the next supplier, the next product launch. They’re not sitting around reading HMRC consultation documents for fun.
Which is exactly why I’m writing this post. Because the £135 parcel rule — one of the quietly significant bits of UK customs policy — is on its way out. And if you’re importing products from China or Vietnam into the UK, you need to understand what’s coming before it catches you off guard.
Let’s get into it.
The £135 threshold is the UK’s customs duty de minimis — in plain English, the value below which no import duty is charged when goods enter the United Kingdom. If your shipment is valued at £135 or less, HMRC doesn’t collect import duty. Above £135, standard import duty rates apply based on the commodity code of your goods.
Note: this is specifically about import duty, not VAT. Import VAT applies to all goods entering the UK regardless of value, and since 2021 this has been collected at the point of sale for overseas sellers selling directly to UK consumers. The £135 rule is purely about whether customs duty is charged on top.
For many small UK businesses that source in low volumes — test orders, samples, small replenishment runs — the £135 threshold has meant genuine cost savings. A £120 sample order from a Chinese factory, for instance, currently clears customs with no duty charge (though VAT still applies).
The short answer: the global marketplace has changed, and the threshold is increasingly seen as a loophole that benefits overseas sellers more than British businesses.
The rise of direct-from-China eCommerce platforms — selling individual low-value parcels directly to UK consumers — has placed enormous pressure on UK retailers and brands who pay full UK duty on their stock. When a competitor can ship direct to a UK consumer at £134 with no duty, and you’re paying duty on every pallet you import to a UK warehouse, the playing field isn’t level. The UK government knows this.
The EU recognised the same issue and abolished its €22 VAT exemption back in 2021. The US has faced intense political pressure over its $800 de minimis rule. The UK’s £135 threshold is part of a broader global conversation about how to fairly tax cross-border e-commerce — and that conversation is moving toward reform.
Sourcing Hack #1:
If your current supplier sends you multiple small-value invoices (each under £135) to reduce your duty exposure — stop. This is called ‘invoice splitting’ and HMRC treats it as customs fraud. The correct approach is declaring the true transaction value of your goods. Work with a reputable sourcing agent and customs broker to ensure your declarations are always accurate.
The UK government has been consulting on reforms to the low-value import framework as part of its post-Brexit customs modernisation programme. The central proposal is to lower or eliminate the £135 customs duty de minimis — meaning more imported goods would become liable for duty, regardless of their individual consignment value.
The phased implementation timeline, with full reform targeted by 2029, gives British businesses and importers a window to adapt — but it’s not a window to ignore. The direction of travel is clear: importing will cost more for low-value consignments than it does today.
For UK eCommerce sellers using fulfilment-from-China models (where goods ship direct from Chinese warehouses to UK consumers), the impact will be significant. For established UK importers bringing stock into a UK warehouse, the effect is more nuanced — but still worth planning for.
Sourcing Hack #2:
Now is a great time to review your sourcing model. If you’re currently relying on frequent small orders (multiple shipments under £135 each), consider whether consolidating into larger, less frequent shipments could reduce your per-unit landed costs. A good sourcing agent can help you model the difference. See our Complete Guide to Importing from China to the UK for a breakdown of how landed costs are calculated.
The impact depends on your current business model. Here are the three most common scenarios:
Direct-from-China dropshipping or fulfilment: This is the model most exposed. If you’re currently leveraging the £135 threshold to ship individual parcels from China duty-free, the reform will add duty costs to every order. Margins will compress. You’ll need to either absorb the cost, raise prices, or restructure your supply chain around UK-held stock.
UK warehouse / bulk import model: If you import stock in bulk to a UK warehouse and fulfil from there, your import duty exposure is already calculated on the full shipment value — so the threshold change has less direct impact. Your competitors who relied on the duty-free loophole will actually become less competitive relative to you.
Amazon FBA sellers sourcing from China: Whether you ship direct to Amazon’s UK fulfilment centres or to a prep centre first, you’re typically importing at the full consignment value — so you’re largely unaffected by the £135 threshold. Your bigger opportunity may be that direct-from-China competitors become less price-competitive post-reform.
The good news: you have time. The 2029 implementation horizon means there’s a genuine window to review and restructure your sourcing model if needed. Here’s what I’d recommend:
Understand your current landed costs properly. Do you know your exact duty rate on each product you import? Your commodity code determines the rate — and it’s worth checking whether you’re using the most accurate code. A customs broker can audit this for you. Our post on white label vs private label touches on how product decisions upstream affect your import cost structure downstream.
Get your EORI number sorted. If you’re importing regularly and don’t have an EORI (Economic Operator Registration and Identification) number, get one now. It’s free, quick to apply for, and mandatory for importing goods into the UK.
Build a relationship with a customs broker. Customs compliance is getting more complex, not less. A good customs broker will ensure your import declarations are accurate, help you classify goods correctly, and keep you ahead of regulatory changes.
Review your supply chain model. If your model depends on frequent small-value shipments, now is the time to explore whether consolidation makes economic sense. Larger, less frequent shipments often reduce per-unit freight costs too.
Sourcing Hack #3:
If you’re an eCommerce seller who’s been relying on direct-from-China fulfilment, this reform is actually an opportunity. UK-held stock will become a genuine competitive advantage as duty parity closes the price gap between domestic fulfilment and direct-from-China models. Build your UK stock position now, before your competitors do.
The £135 reform doesn’t happen in isolation. UK import duties are also under review as part of the UK’s ongoing Global Tariff Schedule negotiations and post-Brexit trade policy. The UK has already made changes to tariffs across several commodity chapters, and there are active consultations on further adjustments.
For UK businesses importing from China specifically, it’s worth noting that the UK maintains its own tariff schedule (different from both the EU’s and the US’s), and duty rates vary significantly by product category. Electronics, clothing, furniture, health and wellness products — each carries its own rate, and the cumulative effect on landed cost can be significant.
Understanding your sourcing agent’s role in navigating this landscape is important. A good sourcing partner doesn’t just find you a factory — they help you think through the full landed cost picture, including duties, freight, and compliance costs.
Sourcing Hack #4:
Don’t wait until the reform is finalised to act. Customs policy announcements rarely come with generous lead times for business adjustment. Build a landed cost model that assumes the £135 threshold disappears entirely, and check whether your margins still work. If they don’t, now is the time to renegotiate supplier pricing, explore sourcing from Vietnam (which often has different tariff advantages), or shift your product mix. Our team at Epic can help you model this — email us at hello@epicsourcing.co.uk.
It’s worth noting that the UK-Vietnam Free Trade Agreement (UKVFTA) — which came into force in 2021 — means many goods sourced from Vietnam attract lower or zero import duties into the UK compared with equivalent products from China. For UK brands considering their sourcing strategy in light of customs reform, Vietnam is worth serious evaluation.
At Epic, we have bilingual sourcing teams on the ground in both China and Vietnam, and we regularly help UK brands model the cost difference between the two countries. The right choice depends on your product category, quality requirements, MOQs, and lead time tolerance.
We also have a great post on white label vs private label for UK businesses which covers how your product strategy affects your sourcing options. The two decisions — what kind of product to build, and where to make it — are connected.
The £135 rule refers to the UK’s customs duty de minimis threshold. Goods imported into the UK with a customs value of £135 or less are exempt from import duty (though import VAT still applies). Above £135, standard UK tariff duty rates apply based on the product’s commodity code. This threshold is under reform by the UK government, with changes expected to be implemented by 2029.
No — the £135 rule only affects customs duty, not VAT. Import VAT applies to all goods entering the UK regardless of value. Since 2021, overseas sellers and online marketplaces are required to collect UK VAT at the point of sale for goods valued at £135 or less sold directly to UK consumers. The £135 threshold is purely about duty, not VAT.
Amazon FBA sellers who import stock to UK fulfilment centres in bulk shipments are largely unaffected — their duty exposure is already calculated on the full shipment value. The bigger impact is on direct-from-China fulfilment models and dropshipping arrangements that currently exploit the £135 threshold. FBA sellers may actually benefit competitively as those models become more expensive.
An EORI (Economic Operator Registration and Identification) number is required by HMRC for any UK business that imports or exports goods. It’s free to apply for through the HMRC website and is a prerequisite for clearing goods through UK customs. If you’re importing products from China or Vietnam regularly, you must have one.
Several strategies can help: ensure you’re using the most accurate commodity code for your products (some codes attract lower rates), explore whether sourcing from Vietnam offers tariff advantages under the UKVFTA, consolidate shipments to reduce per-unit freight costs, and work with a customs broker to review your import declarations for accuracy. Our Complete Guide to Importing from China to the UK covers duty optimisation in detail.
We’re a sourcing agency, not a customs broker — so we work alongside your customs broker rather than replacing them. That said, we help UK clients understand their full landed cost structure (including duty estimates) as part of our sourcing process, and we can refer you to trusted customs professionals. Book a strategy call and let’s talk through your situation.
The £135 parcel rule has quietly benefited certain importing models for years. Its reform is a signal that the UK government is taking cross-border e-commerce taxation seriously — and that the competitive landscape for UK retailers, importers, and eCommerce brands is going to shift.
The businesses that thrive through this change will be the ones who understand their landed costs, have strong supplier relationships, and have built sourcing models that don’t depend on regulatory loopholes. That’s exactly what Epic Sourcing helps UK brands build.
Whether you’re evaluating your current supply chain, considering a move to white label or private label products, or simply want to understand whether your import costs are optimised — we’re here to help.
Reach us at hello@epicsourcing.co.uk or book a free strategy call. Let’s make sure your business is ready for what’s coming.
TK Wang, Founder & Director @ Epic Sourcing
