UK Advances the Cancellation of Duty Exemption for Packages Under £135
The UK government announced that it will advance the cancellation of duty exemptions for low-value packages under £135 to October 2028, leading to higher tax compliance costs for cross-border direct shipping models.
What are the key facts?
- 1Effective date: October 2028
- 2Scope: Packages under £135
What happened?
The UK Treasury has announced the advancement of the cancellation of the duty exemption for low-value imported goods under £135 to October 2028. After the new rules come into effect, related packages will be subject to normal import duties and a 20% VAT. This policy adjustment will directly affect sellers in the cross-border e-commerce sector, particularly those that rely on direct shipping models. With the collection of duties and VAT, sellers may face greater pressure in their price competition with consumers. This change also means that sellers need to make corresponding adjustments in product pricing and tax compliance to ensure continued sales and compliance.
What does this mean for cross-border sellers?
Sellers should gradually reduce their reliance on direct shipping models and consider transferring high-turnover products to UK or EU overseas warehouses for shipping. Future planning for tax compliance strategies should be prioritized to mitigate potential cost increases.