The Exchequer Secretary to the Treasury, Dan Tomlinson, told Parliament on 23 June 2026 that the government will remove the customs duty relief on low value imports in October 2028. That is six months sooner than the "March 2029 at the latest" date the Chancellor set when the policy was first announced at the Autumn Budget in November 2025. Once the relief goes, parcels worth £135 or less owe customs duty like any commercial shipment, and they clear under a new set of customs arrangements with new declaration and data requirements.
This is a United Kingdom measure. It binds goods placed on the UK market. An importer who only sells into the United States, the EU or Australia is not caught by this rule, though every one of those markets is moving the same way, which is the point to hold until the end.
What is actually being removed
Be precise about the word "loophole" the headlines use. VAT has been due on these parcels since the 2021 reforms, so VAT is not the change here. What still stands today is the customs duty relief, sometimes called low value consignment relief on duty. That is the break the government is ending. After October 2028, a £40 phone case or a £15 dress posted from Shenzhen to a UK doorstep is rated for customs duty by its HS code and its country of origin, the same way a pallet of the same goods cleared by a high street retailer already is. The Treasury consultation that ran from 26 November 2025 to 6 March 2026 also floated a possible per-parcel administration fee and changes to how the duty and data get collected, so the cost per parcel is not only the headline duty rate.
Why this lands on importers, not only on Shein and Temu
The political target is the direct-ship marketplace model, where a seller posts goods from an overseas manufacturer straight to the shopper and skips the costs a bulk importer carries. Retailers including Primark, M&S and the British Retail Consortium pushed for the change. The BRC's chief executive, Helen Dickinson, called the six-month acceleration too small, saying a three-year timeline was already too long and "bringing it forward by just six months does not go far enough."
The rule does not check who you are. It checks how the goods arrive. If you run a direct-to-consumer brand that fulfils UK orders by shipping each unit individually from a Chinese factory or third-party warehouse, you sit inside the same regime as the marketplaces. From October 2028 every one of those parcels carries a customs entry, a declared value, an HS code and a country of origin, and the duty attaches to it. The thing that made small parcels cheap was the relief, and the relief has a date on it now.
The same announcement opened a review of how VAT is collected through online marketplaces, aimed at sellers that route trade to avoid the VAT they owe. If you sell into the UK through a marketplace, expect the rules on who accounts for that VAT to tighten alongside the duty change.
What to check before your next UK-bound order
First, separate your UK sales into low-value parcels versus bulk commercial imports, because only the parcel flow is exposed here, and a customs-cleared bulk shipment into a UK warehouse starts to look relatively cheaper once the parcel relief is gone. Second, get the correct HS code and a defensible declared value for every product now, because after 2028 those two numbers set the duty on each parcel, and a wrong code or an under-stated value is your liability as the importer, not the factory's. Third, confirm the real country of origin, since duty follows origin and a China-plus-one routing that cannot prove substantial transformation will not dodge it. We walk through classification in our guide on HS codes when importing from China, and the EU's parallel move in our piece on the EU de minimis change on 1 July 2026.
See the factory before the duty follows it
A correct customs declaration starts with two facts a buyer working from photos cannot confirm. What the product is actually made of, which sets the HS code. And which factory actually makes it, which sets the country of origin. That is what Mila records. A verified English and Mandarin-speaking agent runs a GPS-stamped video audit of the real manufacturer, captures the material composition and the true production site, and holds the supplier to a bilingual NNN before any money moves, inside one WhatsApp thread you watch and run. Map that while the order is live, so the duty that follows your goods into the UK is one you can declare and defend.
Sources: GOV.UK / HM Revenue & Customs, "Government backs high street with acceleration of cheap import reforms and crackdown on dodgy online sellers," 23 June 2026 (at Budget 2025 the Chancellor announced scrapping the customs duty relief on low value imports of £135 or less; the government has accelerated delivery of the reform by six months to October 2028, and opened a review of how VAT is collected through online marketplaces). HM Treasury, "Reforming the customs treatment of low value imports into the United Kingdom," published 26 November 2025 (announces removal of the £135 customs duty relief and consults on new duty-payment and data arrangements; VAT has been due on these goods since 2021 reforms; consultation ran 26 November 2025 to 6 March 2026, with the relief to be removed from March 2029 at the latest before the June 2026 acceleration). City A.M., "Ministers speed up crackdown on Shein and Temu by just six months," 23 June 2026 (government will end the relief in October 2028, six months earlier than planned; British Retail Consortium chief executive Helen Dickinson said bringing it forward by six months does not go far enough).