The government has announced a formal review of the UK’s Low Value Imports regime, which currently allows goods valued at £135 or less to enter the country without customs duties. This move follows concerns raised by major UK retailers who argue that the current system gives an unfair edge to overseas sellers.

For small businesses involved in cross-border e-commerce, drop-shipping, or using fulfilment centres based outside the UK, the review could result in substantial changes to how low-value goods are taxed at the border.

What Is Under Review?

The current regime was introduced to simplify international trade and reduce administrative burdens, especially for lower-value items. It is commonly used by:

  • Online retailers sourcing stock from overseas suppliers

  • Drop-shipping operations delivering goods directly to customers

  • Small businesses importing goods in limited quantities

However, UK-based retailers such as Next and Sainsbury’s have criticised the system, arguing that they are disadvantaged by having to charge VAT and, in some cases, pay tariffs on similar goods.

In light of this, the Chancellor has confirmed that the Low Value Imports regime will undergo a full review, with stakeholder consultations set to begin next month. According to the government, the review will assess:

  • The impact on UK consumers, including potential effects on prices and product availability

  • The level of administrative burden, particularly for small importers

  • Fairness and competitiveness between UK-based and overseas sellers

  • Support for innovation and flexibility within online retail models

What Does It Mean for Small Businesses?

For many SMEs and independent e-commerce traders, the current low-value threshold helps manage import costs and maintain profitability. Any reform could bring increased import expenses, added paperwork, or challenges in sourcing from global suppliers.

Nevertheless, the government has indicated that the review will aim for a balanced approach—seeking fairness across the market while avoiding undue disruption to businesses that depend on streamlined international logistics.

Next Steps

The formal consultation is expected to commence in the coming weeks, with policy decisions anticipated later this year. No changes have been confirmed at this stage, and any updates will be shaped by both economic impact and consumer needs.

We will continue monitoring developments and will provide updates as the review progresses.

Engaging in international trade can offer significant growth potential—even for smaller enterprises. If you need advice or guidance on import taxes or compliance, please do get in touch. We’re here to help.

See: Chancellor unveils plans to maintain level playing field for British business