Autumn Budget: VAT, Customs and International Trade

Author: Jamie Mcleod, Director, VAT, Customs and International Trade

In today’s Autumn Budget, the UK government confirmed its intention that the longstanding Low Value Import (LVI) relief for goods valued at £135 or less will be removed, with new customs and VAT arrangements to be introduced by March 2029 at the latest.

This move is part of a broader effort to modernise the UK’s customs regime, improve compliance, and support domestic retailers.

The European Union has stated it will remove its €150 low-value customs threshold as soon as possible in 2026, and in the United States, the ($800) de minimis threshold was removed in August. These developments reflect a coordinated international move towards greater oversight of low value imports. 

In the UK today

• LVIs (≤£135) benefit from full customs duty relief.
• Simplified BIRDS (bulk import, reduced data set) declaration is used for customs entry.
• VAT is collected and declared by the seller at the point of sale (unless a marketplace is involved).
• There are no additional administrative or handling fees.
• No fiscal representative is required for non-UK sellers. 

The government has issued a consultation document which outlines the following proposed changes to the UK’s treatment of low value imports:

• LVI relief will be removed; LVIs will be subject to the UK Global Tariff (UKGT).
• a new system will be introduced, with item-level data required for each consignment
• both VAT and customs duty will be payable, likely via an integrated process
• potential introduction of a new handling fee per consignment or item
• a fiscal representative may be mandatory for non-UK sellers/marketplaces without a presence in the UK

These proposals are closely aligned with the direction of EU customs reform, which will also see the removal of low value duty relief, increased data requirements, and a shift in responsibility for customs and VAT to sellers and online marketplaces.

Customs impacts

All low value consignments will become subject to the UK Global Tariff, in line with all imports which today exceed the de minimis threshold. The current BIRDS declaration will be replaced by a new system requiring detailed, item-level data, including product descriptions, values, and consignor/consignee information.

A key change is that sellers and online marketplaces will be directly responsible for paying customs duty to HMRC on a quarterly basis. Non-UK-established businesses may need to appoint a UK-based fiscal representative, who will be jointly and severally liable for customs debts. The government is also consulting on introducing a handling or administrative fee, which could be charged per consignment, per item, or per product type.

Certain goods, such as excise, restricted, or those subject to trade remedies, will be excluded from the new LVI arrangements and must use standard customs procedures. Relief for non-commercial consignments (gifts) sent between private individuals valued at £39 or less will remain.

VAT impacts

VAT will continue to be due on all imports, but the process will be further aligned with the new customs arrangements. VAT will be calculated on the customs-inclusive value of goods, so customs duty will itself become part of the VAT base. The government is considering integrating VAT and customs duty collection into a single process for LVIs, allowing both to be paid together via a unified system.

For non-UK-established sellers and marketplaces, the requirement to appoint a UK-based fiscal representative may extend to VAT debts as well as customs. For goods excluded from the new LVI arrangements, VAT will continue to be collected at the border as part of the standard import process.

Next steps

The consultation is open until March 2026, with implementation expected by March 2029. Businesses should review their processes, assess data and system readiness, and consider the implications of fiscal representation. Engagement with the consultation is recommended to ensure practical challenges are addressed.

While the changes will require significant adjustments for businesses involved in cross-border e-commerce, the extended implementation period provides time to prepare.

Crowe’s customs team is available to support clients in understanding the impact, responding to the consultation, and preparing for the transition.

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Author: Andy Spencer, Director, VAT, Customs and International Trade

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Author: Jon Archibald, Director, VAT, Customs and International Trade

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Author: Andy Spencer, Director, VAT, Customs and International Trade

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Author: Adam Cutler, Director, VAT, Customs and International Trade

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