Low Value Import Rules Under Review – What It Could Mean for Small Importers and E-Commerce Sellers
The government has announced a formal review of the UK’s Low Value Imports regime, which currently allows goods worth £135 or less to be imported without paying customs duties. The review comes in response to concerns from some large UK retailers, who argue that the current system gives an unfair advantage to overseas sellers.
For small businesses that rely on cross-border e-commerce, drop-shipping, or fulfilment centres based outside the UK, this review could lead to significant changes in how goods are taxed at the border.
What’s Being Reviewed?
The existing system was designed to simplify trade and reduce admin costs, particularly for lower-value items. It’s widely used by:
- Online sellers sourcing products from international suppliers.
- Drop-shipping businesses shipping goods directly to customers.
- Small retailers importing goods in low volumes.
However, large domestic retailers like Next and Sainsbury’s have argued that this setup disadvantages UK-based sellers who must charge VAT and, in some cases, pay tariffs on similar goods.
In response, the Chancellor announced that the Low Value Imports regime will be reviewed, with stakeholder engagement beginning next month. According to the government, the review will consider:
- The impact on UK consumers, including any changes in pricing or availability of goods.
- Administrative complexity, especially for smaller importers.
- Fairness and competitiveness for UK-based and international sellers.
- The need to support innovation and flexibility in online retail models.
Why It Matters for Smaller Businesses
For many SMEs and independent e-commerce businesses, the low value threshold helps keep costs down and margins sustainable. Changing the rules could mean higher import costs, more paperwork, or even reduced access to overseas suppliers.
That said, the government has signalled it will aim to strike a balance – ensuring fairness for all types of businesses without placing unnecessary burdens on those who rely on efficient global supply chains.
What’s Next?
The Low Value Imports review will launch in the coming weeks, with decisions likely to follow later this year. No changes have been confirmed yet, and any reform will need to take into account both business impact and consumer outcomes.
We’ll continue to track the consultation and share updates as they become available.
International business can open up many opportunities, even for small businesses. If you need any help or advice on import taxes please get in touch. We would be happy to help you.