UK £135 Customs Duty Relief Ends: What It Means for Shopify Sellers

The UK £135 customs duty relief is on its way out, and sooner than first planned. In July 2026, the government confirmed that new arrangements for low-value imports will apply by October 2028 at the latest, six months earlier than the March 2029 date announced at the 2025 Budget. Every commercial parcel worth £135 or less will then face customs duty.

At the same time, UK brands shipping into Europe face a new cost. Since 1 July 2026, the EU has charged a flat €3 fee on small parcels under €150.

If you sell across borders on Shopify, in either direction, your landed costs, product data and fulfilment model all need a rethink. This article explains what has been decided, what is still open, and what to do now.

What is changing in the UK?

At present, commercial imports worth £135 or less are relieved from customs duty. KPMG's summary of the Autumn Budget 2025 set out the plan to remove this relief by March 2029 at the latest, and noted that tariff suspensions will continue until 31 December 2026 while HMRC reviews further extensions.

The government then consulted between 26 November 2025 and 6 March 2026, receiving 165 responses. The government's July 2026 consultation response confirmed the key design choices.

What has been decided

• Timing: the new low-value import arrangements will be in place by October 2028 at the latest.
• Scope: mandatory for consignments of £135 or less, with exclusions such as excise goods and goods with import restrictions.
• Who pays: sellers, or online marketplaces that facilitate the sale, will pay customs duty quarterly, with payments that can align with VAT return cycles.
• Fiscal representatives: sellers and marketplaces without a UK presence will need a UK-based fiscal representative, who shares joint and several liability.
• Item-level data: sellers and marketplaces will provide item-level data to HMRC, including descriptions and values.
• No simplified tariff: traders must classify goods and apply full UK Global Tariff rates.
• Gift relief: the £39 relief for genuine gifts between individuals stays.

What is still open

• An admin fee. The government will introduce a fee on low-value imports, but its rate and design are not yet set. The consultation's illustrative figures of £0.50, £2 and £5 per consignment are not confirmed policy.
• VAT collection. No final decision has been made on how VAT will work alongside the new customs process.

Why is this happening now?

UK retailers have campaigned hard on the issue. RTE reported on 27 May 2026 that 16 retailers, including M&S, Next, Primark, ASOS and Currys, wrote to the Prime Minister and Chancellor calling for an interim £2.60 duty on low-value parcels. Their letter said low-value import trade rose by more than 50% between 2023-24 and 2024-25. The interim charge is a retailer proposal, not government policy.

Deloitte's analysis notes that direct-to-consumer ecommerce models are the main users of the relief and will face tariffs on a wide range of products, while UK-based retailers may benefit from a more level playing field.

What about UK brands selling into the EU?

The EU is tightening too. Euronews reported that EU countries agreed a temporary €3 fee on small parcels valued under €150, starting 1 July 2026. It is charged per parcel, not per item, and applies until the EU settles on a permanent replacement for its duty threshold.

Who is affected on Shopify?

Overseas brands selling into the UK

Brands shipping direct to UK customers from outside the UK will need to collect and pay duty, provide item-level data, and appoint a UK fiscal representative. For many, holding stock in a UK warehouse or 3PL will become more attractive.

UK brands using overseas suppliers or fulfilment

If you dropship or fulfil UK orders from abroad, duty will now be due on parcels that were previously relieved. Your margins and pricing need modelling now, well before 2028.

UK brands shipping to EU customers

The €3 fee already applies. Consolidating orders, raising free-shipping thresholds or moving to EU-based fulfilment can reduce its impact.

Why does product data become the critical issue?

Under the new UK rules, sellers and marketplaces will report item-level data to HMRC and pay duty based on full tariff classification. That turns customs from a carrier's problem into a catalogue problem.

For a typical Shopify store, the weak points are predictable:

• Missing or generic HS codes. Many stores have never set a commodity code, or use one code for an entire collection.
• Vague descriptions. "Gift set" or "accessory" will not be enough when descriptions go to HMRC.
• No country of origin. Origin affects duty rates and preferential treatment, yet it is often blank.
• Values that do not match. Discounts, bundles and free gifts complicate the customs value of each item.

Fixing these now has benefits beyond 2028. Accurate customs data reduces delays and surprise charges for international customers today, including those in the EU. If your product data lives in an ERP, it is usually easier to manage there and sync to Shopify.

What should Shopify sellers do now?

Start with data

1. Classify every SKU to a UK Global Tariff commodity code. With no simplified tariff, accurate classification is essential.
2. Record country of origin and customs values in Shopify or your ERP, at variant level where needed.
3. Clean product descriptions so they are specific enough for customs, not just marketing copy.

Then model costs

1. Use Shopify Markets duties and import tax settings to compare charging duties at checkout (DDP) with collecting on delivery (DDU).
2. Build a landed-cost model with duty, the expected admin fee range and the EU €3 fee.
3. Review free-shipping thresholds and pricing by market.

Then decide on fulfilment

1. Overseas brands should compare a UK fiscal representative plus direct shipping with UK stock and a UK 3PL.
2. UK brands with EU demand should assess EU fulfilment against the per-parcel fee.
3. Revisit the decision once the admin fee and VAT model are confirmed.

Customs and VAT rules are detailed, so confirm your set-up with a customs adviser or accountant before changing pricing.

Conclusion

The end of the UK £135 customs duty relief is now firmly on the calendar, with October 2028 as the latest date and key design choices already made. Combined with the EU's €3 parcel fee, cross-border ecommerce in and out of the UK is becoming more expensive and more data-heavy.

Brands that classify products, model landed costs and choose fulfilment models early will be able to price confidently instead of reacting in 2028. If you need help with Shopify Markets, product data or connecting customs data to your back office, ONEXT's Shopify development team can support you as a trusted delivery partner.