The UK Government has announced major customs reforms as part of the 2025 Budget – changes that will significantly affect how low-value eCommerce shipments are imported into the UK over the coming years.
These updates mark the most substantial shift in small-parcel import policy since Brexit, and businesses involved in global eCommerce supply chains will need to begin preparing now.
Below is a breakdown of the confirmed measures and what they mean for importers, marketplaces, consolidators, postal operators, and carriers.
1. The £135 Duty-Free Threshold Will Be Removed by March 2029
The government has confirmed that the current duty relief for consignments valued at £135 or below will be abolished no later than March 2029.
What this means for businesses
All low-value goods entering the UK will become subject to customs duty.
The measure is expected to generate significant annual revenue for HM Treasury.
It aims to level the playing field between direct-to-consumer overseas sellers and traditional bulk import channels, where duties already apply.
In addition, a formal consultation has been launched to design a new customs model for low-value imports.
Areas under review include:
How duty will be calculated
Data elements importers will be required to submit
Whether administrative fees will be introduced
The impact on marketplaces, carriers, and postal operators
This development represents a fundamental reworking of how small parcels will be cleared into the UK.
2. Border Locations Will Be Required to Fund Their Own Infrastructure
New legislation in the Finance Bill 2025–26 will mandate that all UK border sites must fund and provide their own customs infrastructure.
This move is intended to:
Bring greater consistency across all ports and postal hubs
Remove ambiguity over operational responsibilities
Support long-term stability in border processes
The update signals a push toward clearer accountability and better-aligned infrastructure planning across the UK border network.
3. Greater Flexibility for Ministers to Adjust Duty Rates
The government will also update tariff provisions under the Taxation (Cross-border Trade) Act 2018, granting ministers expanded authority to specify applicable import duty rates.
While:
No immediate rate changes have been announced
No direct tax impacts will occur at this stage
This legislative update creates room for faster tariff adjustments in future, allowing the government to respond more dynamically to economic conditions, trade priorities, or global market pressures.
4. Further Customs and Tax Reform Expected in 2026
The Budget signals only the beginning of a wider programme of border and tax reform. Additional announcements are expected at a dedicated Tax Update event in early 2026, with a focus on modernising and simplifying customs processes.
This may include:
Streamlining data requirements
Digitising additional customs functions
Enhancing border interoperability and automation
How UKP Worldwide Will Support Your Business
These changes will bring new complexities for organisations importing parcels into the UK – whether you move tens of shipments per day or tens of thousands.
At UKP Worldwide, this is our core expertise.
We specialise in:
UK customs clearance
eCommerce import solutions
Duty management and compliance
International parcel logistics
Returns handling and duty drawback
As the reforms evolve, UKP Worldwide will:
Monitor all government consultations and policy updates
Provide clear, actionable guidance for affected businesses
Help you understand operational and financial impacts
Prepare your organisation for new duty, data, and compliance requirements
Our goal is to ensure your supply chain remains compliant, efficient, and competitive- no matter how the regulatory landscape changes.
If you’d like tailored advice on how these Budget announcements may affect your operations, our team is ready to help.
Contact UKP Worldwide for guidance and support.
