Compliance
Preparing for the New Low-Value Imports VAT Rules: What UK Businesses Should Do
Starting from October 2028, UK businesses trading cross-border will face accelerated changes to the VAT/duty relief regime on low-value imports—affecting pricing, supply chains, and customer delivery models.
By NomadicTax Research Team • 5-8 min read • July 9, 2026
## What’s changing?
The UK government has announced in **Tax Update 2026** that it will **bring forward changes** to the VAT and duty relief regime on “low-value imports” (current relief for goods valued under £135) by **six months**, meaning the removal will now take effect in **October 2028** at the latest. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
## Who is affected?
- **E-commerce platforms** shipping direct to consumers in the UK from overseas.
- **UK retailers** competing with imported goods that currently benefit from reliefs.
- Any business involved in **cross-border trade of small parcels** or goods under £135.
## Why this matters
- **Costing & pricing**: previously duty relief meant the landed cost excluded duty; businesses will need new pricing models.
- **Customs & classification**: the change exposes more items to customs duty and aligns UK with EU rules under the “Customs Reform” programme. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
- **Cashflow impact**: duty and VAT on small shipments could impact margins and require working capital adjustments.
## Steps to get ready
1. **Review imported products**: Which items you import under £135? Determine the future duty/VAT exposure.
2. **Update pricing models**: Ensure consumers are aware of duty/VAT inclusions or exclusions; possibly adjust shipping or handling fees.
3. **Collaboration with marketplaces**: For online platforms, understand how marketplace liability is evolving and the shift of responsibilities. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
4. **Supply chain audit**: Are there customs intermediaries you rely on that may change in cost or availability? Think ahead.
## Real-world example
- A small clothing retailer in UK imports low-cost accessories (e.g. under £135) via marketplace from overseas. Post-October 2028, each shipment will incur VAT & possibly duty under the new rules.
- An online marketplace may need to change terms with overseas vendors to adjust who collects VAT and duty from consumers.
## Key takeaways
- Expect **legal obligation changes from October 2028** at the latest; there will be a **consultation** beforehand if not already completed. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
- Businesses should **budget for increased compliance costs** and **educate customers/supply partners**.
- Maintaining competitiveness will require transparency and efficiency in managing the new cost burdens.
**Bottom line**: The removal of low-value import relief significantly reshapes the cross-border trade landscape. Early planning is vital to stay ahead and protect margins.