For years, a quiet rule has shaped the way hundreds of millions of parcels enter the UK. If a consignment was worth £135 or less, it came in free of customs duty. That single relief is the invisible engine behind the explosion of cheap online shopping — the £8 phone case from a marketplace seller, the £20 dress shipped direct from overseas, the bargain gadget that arrives in a padded envelope a week after you order it.
That era is ending. The government has confirmed it will remove the Low Value Imports relief, make these goods subject to customs duty for the first time, and build an entirely new customs system to handle them — separate from CDS, separate from the current bulk-declaration process, and designed from scratch to cope with a volume of trade that now runs to roughly 1.6 million parcels a day.
At Fn Customs, we spend our working lives inside the UK’s customs systems, and we read this consultation closely the moment it landed. This is one of the most significant structural changes to UK customs since CDS replaced CHIEF. It will reshape how online sellers, marketplaces, parcel operators, and customs intermediaries operate — and most businesses affected by it have, according to the government’s own research, barely registered that it’s coming.
This article explains the reform from the customs angle: what’s actually changing, the new system being built, who becomes liable for duty, and what every business moving low value goods should be doing now to prepare.
What Is the Low Value Imports Relief?
Under the current rules, an individual consignment sent from outside the UK to a recipient in the UK with a declared value of £135 or less benefits from a full relief from customs duty. The goods still attract import VAT — that’s been collected at the point of sale since the 2021 reforms — but no customs duty is charged.
To move these parcels efficiently, most parcel operators and customs intermediaries don’t file a full declaration for each one. Instead, they use a simplified mechanism called the Bulk Import Reduced Data Set (BIRDS), which allows a single declaration to cover many low value consignments at once, with a far lighter data requirement than a standard customs entry.
This system was designed for a different era. When the relief was conceived, low value cross-border parcels were a trickle — occasional gifts, the odd specialist item. The relief and the light-touch data requirements existed precisely because the volume and value were too low to justify the cost of full customs control.
That assumption no longer holds.
Why the Government Is Acting
The numbers in the consultation tell the story better than any argument could.
The government estimates that around 600 million low value consignments were imported using BIRDS in 2024 — roughly 1.6 million per day. The number of consignments bulked through BIRDS is estimated to have more than tripled between 2021 and the year ending June 2024. And the total declared trade value moving through BIRDS rose by more than 50% in a single year, from £3.8 billion in 2023–24 to £5.9 billion in 2024–25 — with HMRC noting the true figure is likely higher still.
A mechanism built for a trickle is now carrying a flood.
Two pressures have forced the issue. The first is fairness. High street retailers — and UK businesses that import in bulk and pay full duty on their stock — have argued they are being undercut by overseas sellers shipping the identical goods direct to consumers duty-free, simply because of the way those goods enter the country. The government has explicitly framed the reform as levelling that playing field: ensuring retailers pay customs duty on what they sell to UK consumers regardless of how they import it.
The second is international alignment. The United States has already scrapped its own “de minimis” exemption, and the EU has announced it will remove its equivalent and introduce new handling charges on low value parcels. The UK was at risk of becoming the last major economy with a wide-open low value channel — an obvious diversion point for goods that could no longer enter elsewhere duty-free.
What’s Actually Changing: The Customs Mechanics
This is where it matters to get into the detail, because the reform is not simply “duty now applies.” It’s a wholesale redesign of how these goods are declared, who is responsible, and what system they flow through.
The £135 duty relief is being removed
Once the reform takes effect, consignments valued at £135 or less — sent by a business to a UK business or consumer — will be subject to customs duty at the UK Global Tariff rates, just like goods imported in bulk. The £135 threshold itself remains as the line that defines a “low value import,” but crossing under it will no longer mean duty-free.
Pro tip: Note the distinction carefully. The £135 threshold is not disappearing — it's being repurposed. Below £135, goods will use the new low value import system. Above £135, goods continue through standard customs arrangements on CDS. The threshold now marks which system you use, not whether you pay duty.BIRDS is being replaced by a new, purpose-built system
This is the part that should command the attention of every parcel operator and intermediary. The government has been explicit: low value imports will no longer be declared using BIRDS or the standard import procedures. Instead, the data will be submitted into a new low value import system, separate from CDS.
In other words, HMRC is building a third major customs platform. We already have CDS for declarations and GVMS for goods movements at roll-on/roll-off ports. This new system sits alongside them, purpose-built to handle the extraordinary item-level volume of low value e-commerce.
The mechanics described in the consultation give a clear picture of how it’s intended to work. Sellers and marketplaces would submit item-level data into the new system. HMRC would issue a reference number back. That reference could then be used to generate a Goods Movement Reference (GMR) on GVMS at RoRo ports, or be linked to an inventory record at airports and other locations — so the goods can be presented to customs, risk-assessed, and cleared. The new system doesn’t replace GVMS; it feeds into it.
The data requirement transforms
Under BIRDS, one declaration covers many parcels with minimal detail. HMRC currently cannot see item-level data — the description, the value, the sender — on individual low value consignments.
That ends. The new system will require item-level data on each consignment: goods description, value, weight, consignor, and consignee. On top of that, parcel operators, intermediaries, and carriers will need to supply movement data — countries of routing, mode of transport at the border, expected date and time of arrival — partly for customs clearance and partly for security and anti-smuggling purposes.
This is a step change in granularity. The whole point of BIRDS was that you didn’t have to provide this. The whole point of the new system is that you do.
Liability shifts to sellers and online marketplaces
Perhaps the most consequential decision in the entire consultation: the government will make sellers — or the online marketplace, where it facilitates the sale — responsible for paying the customs duty. Not the parcel operator. Not the consumer at the door. The seller or the platform.
This mirrors the 2021 VAT reform, which already made marketplaces responsible for collecting VAT on these sales. The logic is that the seller and the marketplace hold the most accurate data about the goods, and that concentrating responsibility on large, well-regulated platforms strengthens compliance. Duty would be paid to HMRC quarterly, aligned with VAT return cycles, and sellers and marketplaces will be expected to register for the new arrangements.
Overseas sellers may need a UK “fiscal representative”
For sellers and marketplaces with no physical presence in the UK, the government is minded to require the appointment of a UK-based fiscal representative — an established UK business that takes on joint and several liability for the customs debts (and potentially the VAT debts) of the overseas seller.
This is a significant door opening for the customs sector. A customs intermediary operating under the indirect representation model is exactly the kind of business that could act as a fiscal representative. For overseas sellers who want to keep shipping to UK consumers, finding a UK partner willing to shoulder that liability may become a condition of doing business.
A “simplified tariff” may soften the classification burden
Removing the relief creates an obvious problem: classifying goods. The UK Global Tariff runs to thousands of 10-digit commodity codes across 97 chapters. Expecting a small overseas seller to correctly classify every £10 item is unrealistic.
So the government is consulting on an optional simplified tariff schedule — collapsing many tariff codes into a handful of “buckets,” each with a single rate. A seller could choose to use the bucket rate to avoid full classification, accepting that the bucket rate might sometimes be a little higher than the precise UKGT rate would have been. Full 10-digit classification on CDS remains available for anyone who wants the precise (and sometimes lower, including 0%) rate. It’s a trade-off between simplicity and precision — and a genuinely sensible piece of design thinking, if it survives to implementation.
A possible per-parcel handling fee
Finally, the government is weighing an additional fee on low value imports to cover the administrative cost of running all this — illustratively floated at £0.50, £2, or £5 per consignment, or alternatively per item or per product type. This would be charged to the seller or marketplace on top of the duty. No decision has been made, and this is one of the most contested elements of the whole package, as we’ll see.
When Is This Happening?
The headline timing: these new arrangements will be introduced by March 2029 at the latest.
That sounds comfortably distant. It isn’t. Building an entirely new customs system, running a co-design process with industry, passing the necessary legislation, and giving hundreds of thousands of businesses — many of them overseas — time to register and adapt is an enormous undertaking. The consultation itself closed on 6 March 2026. The lead time is long precisely because the change is so large.
For any business with a stake in this, 2029 is not “later.” It’s the horizon you should already be planning toward.
The Concerns: Will This Push Up Prices?
A reform this big does not arrive without pushback, and it’s only fair to represent it.
The British Chambers of Commerce has warned that removing the relief risks pushing up prices, harming small businesses, and dampening trade. Its research of over 600 businesses found that more than half of UK goods importers would have to pass increased costs on small shipments through to consumers, with only a minority able to absorb them. Strikingly, around 60% of businesses either didn’t know about the planned change or were unsure whether it would affect them — a remarkable awareness gap for a reform of this scale.
The BCC’s sharpest concern is the proposed per-item or per-consignment fee, which it argues would be inflationary, would distort business behaviour, and would fall hardest on SMEs and on consumers who buy single items online. Its head of trade policy, William Bain, has urged ministers to avoid flat-rate fees, to keep VAT collection at the point of sale to avoid adding friction, and to focus on targeted enforcement rather than blunt across-the-board cost increases. The BCC accepts the UK must respond to the US and EU moves to avoid becoming a dumping ground — but argues the response must be proportionate.
This is a legitimate and important critique. There is a real risk that, designed badly, the reform raises prices on everyday purchases while doing little to catch the genuinely non-compliant traders it’s meant to target. The counter-argument — the one the high street has made for years — is that the current system is itself a distortion, quietly subsidising overseas sellers at the expense of domestic businesses that play by the rules. Both things can be true. The art will be in the design.
What This Means From the Customs Angle
Step back from the politics, and here’s what the reform really represents: low value e-commerce is being brought inside the customs system properly, for the first time.
For two decades, this trade has sat in a lightly-controlled side channel. The reform drags it into the same world of duty liability, item-level data, classification, and compliance that every bulk importer already lives in. That has consequences that ripple far beyond the price of a cheap parcel:
Classification suddenly matters for goods that never needed it. Sellers who have never thought about a commodity code in their lives will need either to classify their products or to opt into the simplified bucket system. Getting it wrong carries the same risks — underpaid duty, demands, penalties — that apply to any importer.
Data accuracy becomes a compliance issue. When HMRC collects item-level data on 1.6 million parcels a day, discrepancies become visible in a way they never were under BIRDS. Undervaluation — long suspected on a chunk of low value trade — becomes far easier to detect.
A new compliance role emerges for UK customs businesses. The fiscal representative model could create real demand for established UK intermediaries willing to act for overseas sellers. It’s a serious responsibility — joint and several liability is not to be taken lightly — but it’s a genuine new line of work that didn’t exist before.
Marketplaces become customs actors. Platforms that thought of themselves as pure intermediaries are being handed direct customs duty liability. The operational and systems work to handle quarterly duty payments, registration, and data submission is substantial, and the clock is ticking.
What Businesses Should Do Now
Even with implementation set for 2029 at the latest, the preparation work starts now — particularly given how few affected businesses are even aware of the change.
1. Establish whether you’re in scope. If you sell goods into the UK from overseas, operate a marketplace, run a parcel or fulfilment operation, or act as a customs intermediary handling e-commerce, this reform affects you. The first step is simply recognising that.
2. Understand where duty liability will sit. If you’re a seller or marketplace, you are likely to become the party responsible for customs duty. Model what that means for your margins and your pricing now, while there’s time to plan rather than react.
3. Audit your product data. Item-level data — accurate descriptions, values, weights — will be mandatory. If your current systems hold patchy or inconsistent product data, that’s a problem to fix well ahead of 2029, not in the final months.
4. Get to grips with classification. Start understanding how your products classify under the UK Global Tariff, and whether the simplified bucket system (if introduced) would serve you better than full classification. This is exactly the kind of work a specialist customs agent can take off your hands.
5. Overseas sellers: think about UK representation early. If you have no UK presence and a fiscal representative becomes mandatory, the businesses willing to take on that liability will be in demand. Securing a reliable UK partner ahead of the rush is far better than scrambling close to the deadline.
6. Watch the detail as it firms up. The consultation has closed, but the co-design phase, the decision on the handling fee, the final shape of the simplified tariff, and the VAT integration are all still to be settled. The arrangements you eventually plan around will be clearer over the coming months.
Frequently Asked Questions
What is the £135 low value imports relief? It’s the current relief that allows individual consignments worth £135 or less, sent from outside the UK, to be imported without customs duty. Import VAT still applies, but no customs duty is charged. The government has confirmed this relief will be removed.
When will the low value imports relief be removed? The new arrangements will be introduced by March 2029 at the latest. The exact date depends on the development of the new customs system and the legislative process.
Will I have to pay customs duty on cheap online orders now? Once the reform takes effect, goods valued at £135 or less will be subject to customs duty at UK Global Tariff rates. Responsibility for paying that duty falls on the seller or the online marketplace, not the consumer at the door — though it may be reflected in the price you pay at checkout.
What is replacing BIRDS? The Bulk Import Reduced Data Set (BIRDS) will be replaced by a new, purpose-built low value imports system, separate from CDS. It will collect item-level data and issue reference numbers that link into GVMS or port inventory systems to clear goods at the border.
Who is responsible for paying the customs duty? The seller, or the online marketplace where it facilitates the sale. Duty will be paid to HMRC quarterly, aligned with VAT return cycles. Overseas sellers without a UK presence may need to appoint a UK-based fiscal representative.
What is the simplified tariff schedule? An optional system being considered that would group many commodity codes into a handful of duty-rate “buckets,” so sellers can apply duty without classifying every item to a full 10-digit code. Full classification on CDS would remain available for those who want the precise rate.
Does this affect goods over £135? No. Goods over £135 continue to use the standard import customs arrangements through CDS, as they do today. The reform concerns consignments valued at £135 or less.
Are gifts between individuals affected? No. The relief on non-commercial consignments sent by one private individual to another, valued at £39 or less, is being retained, so genuine gifts from overseas friends and family can continue duty- and VAT-free.
Preparing Your Business for the New Low Value Imports Regime
This reform is complex, far-reaching, and — for most of the businesses it affects — still largely off the radar. Whether you’re an online seller facing duty liability for the first time, a marketplace working out how to handle quarterly duty payments, a parcel operator preparing for item-level data submission, or an overseas business that will need a UK fiscal representative, the time to start understanding your position is now, not in 2028.
At FN Customs, we help businesses navigate exactly this kind of structural customs change. As an AEO-authorised customs agency, we can assess your exposure to the reform, advise on classification and the simplified tariff options, and help you build the data and compliance foundations you’ll need before the new system goes live. If you’d like to understand what the end of the £135 relief means for your specific business — and how to prepare for it calmly rather than at the last minute — get in touch with our team.
Useful Government Resources:
- Reforming the customs treatment of low value imports into the UK – GOV.UK
- UK Global Tariff – Find your commodity code
- Customs Declaration Service (CDS) – GOV.UK
- Goods Vehicle Movement Service (GVMS) – GOV.UK
Fn Customs Limited is an AEO-authorised customs clearance and freight forwarding agency based in Nottingham, specialising in UK import and export customs compliance.