3 in 5 UK businesses don’t know about this rule change set to hit in 2029 – and it’s going to increase the cost of most things
The UK government is set to eliminate a long-standing customs duty exemption for low-value imports by March 2029 at the latest, a change that could drive up prices for a wide range of everyday goods and catch many businesses off guard.
According to new research from the British Chambers of Commerce (BCC), 3 in 5 UK businesses (60%) are unaware or unsure about the impending reform to the so-called de minimis threshold, which currently allows goods valued at £135 or less to enter the UK without paying customs duties (though VAT has applied since 2021 reforms).
The policy shift, first announced in the Autumn Budget 2025, aims to close what the government sees as an unfair loophole exploited by rapid-growth e-commerce platforms, particularly those shipping low-cost items directly from overseas, such as fast-fashion giants like Shein and Temu.
The change aligns the UK with similar moves in the US (which scrapped its higher de minimis limit) and the EU (introducing new charges on low-value parcels from July 2026).
What the change means
Under current rules, small parcels worth £135 or less are exempt from import tariffs, enabling cheap, direct-to-consumer shipments with minimal friction.
Once reformed, these imports will become subject to customs duties, and the government is exploring options like simplified tariff schedules, potential handling fees per consignment or item, and updated data collection systems to manage the high volume of such shipments.
The BCC warns that the impact could be significant:
- More than half (52%) of goods-importing businesses surveyed said they would pass on a 5-10% cost increase to consumers if duties apply.
- Only 20% believe they could absorb the extra costs internally.
- Among exporters, 24% indicated that a 10-15% rise in costs could jeopardize more than half of their overseas sales.
- Businesses might respond by switching suppliers (21%), consolidating shipments (20%), or scaling back activity (12%), potentially reducing overall trade volumes.
These effects would ripple through supply chains, hitting nearly everything from clothing and electronics to household items and toys—categories heavily reliant on low-value, direct imports.
“E-commerce matters greatly to the UK economy and global trade,” said William Bain, Head of Trade Policy at the BCC.
“We know the trend globally is to abolish de minimis thresholds and levy duties on low value imports given their huge growth in recent years. The US has scrapped its de minimis threshold, and the EU is planning new charges on cheaper imports from July this year.”
This will put exporters’ sales under pressure, and we must respond to ensure we have a level-playing field, he said.
“But we would urge Ministers not to introduce charges per item or consignment by import. Our research shows the increased costs will feed through into higher prices. The Government should also retain VAT being charged at point of sale on transactions for these purchases – a practice followed by many countries in global trade. Its retention would avoid unnecessary complications and additional friction on cross-border e-commerce sales.
“As any UK changes will not happen until 2029 at the earliest, we would also urge firms to be on high alert to report suspected dumping or import surges. Until we catch up, the UK will be at a competitive disadvantage and the Trade Remedies Authority will need good intel to protect our industries.”
Consultation period
The government launched a consultation on the details of the new arrangements (which closed in early March 2026), seeking input on simplified processes to minimise administrative burdens.
The BCC submitted a response calling for proportionate reforms focused on targeted enforcement against unfair practices rather than broad cost hikes, and a careful phasing to protect small and medium-sized enterprises (SMEs) and consumers.
