Changes to Low Value Imports into the UK

During most of 2025, the UK held a consultation asking relevant parties if it should abolish its relief on duties for Low Value Imports (LVI). This is a historic relief that was introduced before the e-commerce boom, primarily to facilitate easier importation where duty amounts were low – something that is no longer the case. The relief means that, for instance, tariffs of up to 12% on clothes are often avoided; these would be payable if items were imported in bulk before being shipped from UK locations.

At the recent UK Autumn Budget, it was confirmed that this relief will be scrapped, and a further consultation was announced to consider how a new system will be implemented. This did not come as a surprise, given the US abolishing its $800 de-minimis limit and the EU planning changes to its own system, which is currently set at €150 and was originally intended for 2028 but is likely to be accelerated. Just last month, the EU also announced a €3 duty charge per item.

The UK has stated that it wants new rules in place by April 2029 at the latest. This means that Christmas 2025 was unlikely to have been the last one for enjoying lower-cost goods, but given how quickly these rules are evolving, those impacted should begin to consider what this means for them now and engage with the consultation, so their voice is heard. With that in mind, I have detailed some key points to cover below.

What is the impact?

The first thing to do is consider what the impact is going to be for your business. If you currently deliver LVI into the UK, then you should already be UK VAT registered, because although import VAT is not levied, there is an obligation to account for “supply VAT” and report this to the tax authority, HMRC. The only reason for not doing this would be if all sales are made via a marketplace, because they would account for the VAT, or if sales are made to a UK VAT-registered business. We know that HMRC are looking at this, with a view to contacting overseas businesses they believe are not complying with the rules. Therefore, checking current obligations is the starting point, and if you are not currently VAT registered, that should be a priority. 

The consultation is also going to consider several other points, all of which need to be considered by businesses as they will be impacted by them in some way or another.

Import declaration process

Currently, most LVI are declared for entry into the UK via the Bulk Import Reduced Data set (BIRD) method, a quick and straightforward process. Going forward, this will not be available, and instead each consignment will need to declare new sets of data – think needing descriptions, value, weight, consignor, and consignee for each item. This is significantly more than the current need.

Duty becomes payable

The headline change is that duty will become due and payable by the seller, as is VAT currently. This means that it will be necessary to know what the duty rate applicable to the goods is. Two options as to how this is calculated are up for consideration, which would simplify the existing UK General Tariff (UKGT):

• Most frequent tariff bucket: look at each chapter from the UKGT and take the most frequently occurring tariff as applicable to all items.
• Highest tariff bucket: the highest tariff from each chapter would be used to put those chapter items in that bucket.

The latter may result in more goods facing a higher tariff than currently applicable; the former will give more variable results. Understanding this will be critical as it will directly impact costs.

Declaration fees at import

The EU is intending to implement a €2 charge for all LVI consignments entering its territory. This is meant to help cover the costs it will incur when managing the new system (and it should be noted that this is different from the recently announced €3 charge, see above). 

The UK’s consultation also asks about this, with fees of 50p, £2 and £5 mentioned. It also considers whether these charges should be levied on a per consignment, item or product type basis. 

Duty, VAT and fee collection and remittance

At the moment, the supply VAT is declared to HMRC via a standard VAT registration. This is as opposed to the EU system, where a special registration, known as the Import One Stop Shop (IOSS), must be used to obtain the relief (and up to 93% of LVI utilise it). HMRC’s consultation considers whether a new payment methodology is required whereby duty, VAT and fees would be remitted via one method. This could see businesses have to change current VAT remittance arrangements or add another method to their existing processes.

Fiscal representation

To obtain an IOSS number when you are not established in the EU, it is necessary to appoint a fiscal representative, who takes on joint and several liability with the seller for VAT due. The UK is considering asking overseas businesses that sell into the UK using LVI to appoint a fiscal representative as well, whose liability could be limited to duty or extended to include VAT as well. This would be a notable change given that the use of such a mechanism is not currently general practice in the UK and would certainly increase costs for sellers.

Next steps 

In total, there are 46 questions in the consultation covering all the above points and some more. It is open to Friday 6 March 2026, after which the responses will be considered and the new rules formulated. This means it is a one-time opportunity to influence how LVI work going forward.

For further information on anything discussed in this article, or how we can help you, please contact your usual Crowe contact.