Is the UK ending the £135 import duty exemption? What it means for importers in 2025
- Bilal
- Jun 3
- 3 min read
Updated: 2 days ago
By tradePhlo – Customs clearance software & brokerage experts
In a move that could significantly impact online retailers, e-commerce platforms, and UK importers, the UK government is considering ending the £135 low-value import duty exemption — a policy that currently allows goods valued under £135 to enter the UK without paying customs duties.
This potential change is part of a wider review aimed at addressing unfair competition from ultra-low-cost overseas sellers and strengthening tax compliance. If implemented, the removal of this exemption would reshape the landscape for thousands of businesses that depend on streamlined, low-cost imports.
What is the £135 low-value import exemption?
The £135 threshold was introduced after Brexit as part of the UK’s new customs model. It means that goods valued below this amount:
Are exempt from customs duties
Still require VAT to be collected, typically at the point of sale
This rule primarily benefits B2C e-commerce imports from overseas sellers — such as Shein, Temu, and other large marketplaces — who use the exemption to ship low-cost goods to the UK with minimal border friction.
Why is it being reviewed?
The exemption has come under increasing scrutiny from UK retailers, politicians, and trade bodies, who argue that it enables “value dumping” — the practice of selling ultra-cheap goods into the UK without a fair contribution to tax and duty.
The proposed review, reportedly supported by senior Treasury officials, follows concerns that:
British retailers are being undercut by non-compliant overseas competitors
Large volumes of low-value imports are escaping duty and regulatory checks
UK customs systems are under pressure due to misdeclared values
Following the July 2024 general election and the new government’s policy direction, fair taxation and protecting domestic industry have become policy priorities.
Who will be affected?
The removal of this exemption would affect a broad range of businesses:
Online retailers sourcing low-cost goods from abroad
Drop-shippers and resellers who rely on low-cost imports
Consumers accustomed to buying cheap products from global e-commerce platforms
Customs agents, brokers, and freight forwarders who will need to process more declarations
It could also increase the burden on smaller businesses that lack in-house compliance tools or brokerage support.
What could change?
If the government proceeds with the policy change, importers can expect:
Customs duties to apply on all imported goods, regardless of value
Full customs declarations for each shipment — even for low-cost items
More paperwork and compliance requirements for e-commerce sellers
Longer lead times at the border and more chance of shipments being held or returned
This would mark a shift towards greater regulation and enforcement, with HMRC likely to increase audits and digital tracking.
How to prepare your business
While nothing is confirmed yet, preparation is key. Here is what you can do now:
Digitise your customs process – Our UK-developed customs clearance software, tradePhlo, automates declarations and ensures full compliance for all value levels, with all duties and VAT calculated in advance
Outsource to trusted professionals – If you're not ready to manage declarations internally, our brokerage team is ready to step in and act on your behalf.
Review your supply chain – Know your supplier origin countries and declaration thresholds. Ensure your values are accurate and compliant.
Stay updated – Follow our blog or sign up for updates — we track all regulatory developments as they happen.
Final thoughts
Removing the £135 import exemption would signal a major policy shift in UK customs. While the move could level the playing field for UK businesses, it may also increase costs and admin for thousands of importers.
If your business relies on low-value goods, now is the time to evaluate your customs strategy. The right tools — and the right support — can make the difference between costly delays and seamless compliance.
Need help navigating the change?
Our expert team offers customs clearance software built for the UK market — and for businesses who prefer hands-off simplicity, our brokerage service takes care of everything for you.
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