A big deal: The end of de minimis relief for low-value imports

In summary

• The UK’s exemption from customs duty for packages worth less than £135 will come in by October 2028, it was announced in July

• In the same month, the EU ended its exemption for packages worth €150 or less, introducing a flat-rate €3 charge per product category as a transitional measure

• Finland has reported a reduction in low-value imports of 76%

• There are no easy ways around it; importers must either pay the customs up front or set up in the EU and import in bulk

The Autumn 2025 Budget announced that the de minimis rule, which allowed goods valued £135 or less to be imported without paying customs duty, was to be scrapped by March 2029. In July, following a three-month consultation, the government announced that would be brought forward by six months.

Low-value import (LVI) relief will be removed by October 2028 at the latest.

As well as removing LVI relief, the government says it will amend legislation to:

• Define LVIs by reference to consignment value for the new customs arrangements and give the Treasury power to amend that definition in secondary legislation 

• Introduce the concept of a fiscal representative, who is jointly and severally liable for customs debt arising from another’s LVI customs declaration

• Allow HMRC to provide for new customs arrangements in secondary legislation

Crucially, though, importers still – for now – have a couple of years to prepare. Exporters to the EU, on the other hand, have to contend with changes straight away.

In the same month as the UK government published the responses to its consultation, the EU removed its €150 de minims relief and introduced a transitional flat-rate €3 customs charge per product category for business to consumer distance sales, with a proposed €2 handling fee per consignment from November 2026. Wider customs reform is expected, again in 2028.

It has already had a dramatic effect – at least in some places: According to the Helsinki Times, the change has cut low-value imports to Finland by more than three-quarters in July, compared with the same period last year. Chinese shipments will have been most heavily impacted: They accounted for 98.5% of LVI lines in the first half of the year.

Some reports from France, which introduced a €2 fee on small parcels in March (now suspended after the EU charge took effect), suggested volumes of parcels entering the country directly fell even more – by 90%. In that case, though, shippers could route through other EU countries.

That’s no longer an option.

In fact, there are really only two choices that now remain for businesses looking to sell low-value goods into the EU – and, for many, no good ones:

• First, they can prepay the €3 customs charge

• Second, they can set up a branch or company abroad, perhaps in Ireland or the Netherlands, and import in bulk

As the European Commission has made clear, using bonded warehouses won’t be a workaround: goods sold to consumers while stored in a bonded warehouse are not considered distance sales, but under customs legislation and the VAT Directive, customs warehouses cannot be used for retail sales anyway.

Neither of the available options is easy. The first is likely to be economically impractical for low-value, high-volume goods, particularly since the charge is per product category: packages containing items with different tariff classifications will have to pay the €3 for each different type of product (although not for multiple items of the same type).

Setting up abroad, meanwhile, is a significant undertaking and precise requirements will vary. Some countries, such as France, allow branches; others, such as Germany, will require a company and the associated complexities around corporation tax, transfer pricing and all the rest of it.

And, of course, it’s not meant to be easy. The aim of the EU’s move, and the UK’s, too, is specifically to make it harder for overseas retailers to sell to consumers, and stem the flood of goods from cheap overseas online retailers, particularly from China.

The early evidence suggests it’s going to prove effective.

Approval code: BTSHH082652