UK to Advance the Abolition of Low-Value Parcel Tax Exemption Policy
The UK Treasury announced the advance of the abolition date for the low-value import goods tax exemption policy to October 2028. This means significantly increased costs for direct mail small parcels in the future, prompting cross-border sellers to accelerate the transition to overseas warehouse models.
What are the key facts?
- 1Abolition Date: October 2028
- 2Scope of Impact: Parcels £135 and below
- 3Tax Changes: Import duties and 20% VAT applicable
What happened?
To address retailers' calls for fair competition, the UK government has decided to remove the tax exemption for parcels under £135 earlier. This new tax policy will officially take effect in October 2028, which means that low-value parcels will no longer enjoy tax exemptions and must pay the specified import duties along with 20% VAT. This move will force sellers to re-evaluate their logistics and warehousing strategies, especially for handling direct mail small parcels, significantly increasing costs for cross-border e-commerce.
What does this mean for cross-border sellers?
Direct mail sellers should utilize the grace period to gradually transfer high-turnover products to overseas warehouses in the UK or EU to avoid profit compression due to rising tariff costs in the future. The highest priority action: review inventory and shipping strategies this week, and plan the transition to overseas warehouses.