The £135 customs duty relief for low-value imports into the UK has a confirmed end date: the Government announced in the Autumn Budget 2025 that it will be abolished by March 2029 at the latest. The current relief remains in place through at least 31 December 2026, but the direction of travel is clear, and businesses that rely on it, or compete against imports that do, should be planning now rather than waiting.
The phased timeline reflects the scale of what the Government is building. The relief will not simply be switched off. It will be replaced by an entirely new customs framework specifically designed for low-value imports, known as the Low Value Import (LVI) system, which will handle the declaration, valuation and duty collection requirements for a category of trade that currently runs to around 1.6 million consignments per day. A formal consultation on the design of that system closed in March 2026, and the 2026 to 2028 period will be used to develop the technical architecture and test the new arrangements.
For businesses, the compliance transition is the most important thing to understand. The relief has allowed low-value consignments to enter the UK with minimal documentation and no duty liability. Once it is removed, those consignments will be subject to the UK Global Tariff, requiring accurate classification, valuation and, under the current proposal, allocation of liability between sellers, online marketplaces and logistics providers. That allocation of responsibility is still being worked through in policy, but the direction mirrors the VAT model introduced in 2021, where platforms already carry collection obligations.
The enforcement picture is equally important. The current system has created significant scope for undervaluation, misdescription and consignment-splitting. HMRC has made clear that the new LVI framework is designed partly to address those problems, and enhanced data requirements, including item-level information, are likely to form part of the final model.
March 2029 may feel distant. For businesses that need to renegotiate supply contracts, review platform obligations, build new customs processes and engage with HMRC on the consultation, it is not.
Hammad Baig advises on all aspects of indirect tax, VAT, customs duties, excise, insolvency and commercial litigation. Should you wish to instruct Hammad Baig then please do not hesitate to contact his clerk Geoff Carr.