Background
The Low Value Imports (LVI) rule allows businesses and individuals outside the UK to send goods to customers with a value of less than £135 in the UK without paying the relevant tariff or The use of the rule has grown quickly in recent years creating a significant challenge for UK high street retailers. It has distorted competition with UK retailers, who pay tariffs and full customs costs to import goods they sell through their supply chains.
Working with members in 2025 the BRC persuaded the Government to review the operation of the LVI rule. The Government issued a consultation proposing an end to the exemption by April 2029 replacing it with a system where businesses pay a simplified tariff, increased customs surveillance and a possible additional customs handling fee. You can read our response here where we agreed with the proposed changes but argued waiting 3 years for implementation was too long.
Other jurisdictions, including the US and EU have already taken action on LVI. The US removed its LVI exemption completely in 2025. The EU is imposing a flat fee of €3 on all LVI parcels in July 2026 before implementing a new system of tariffs and customs controls in 2028.
What Action will the Government Take?
The consultation closed in March 2026 and the Government has now set out next steps.
- · It intends to bring forward legislation to end the current approach. Full details will be published shortly, but is expected to follow the consultation proposals including applying a simplified tariff approach to imports and increased customs controls. It is not clear if it will also apply an additional handling fee on top of the tariffs.
- · The new legislation will now be implemented by October 2028 at the latest, which is six months earlier than the original proposal. We had always pushed for quicker implementation which was recognised by Government, but we had hoped for an acceleration in the timetable of more than 6 months. The Government says it has balanced the time for intervention to help UK retailers against the time it will take UK customs and importers and parcel operators to be ready for the new regime.
- · The Government is not introducing an early intervention similar to the EU approach. It says it does not currently collect the data to follow the EU approach of a charge per parcel and feels it is better to develop a comprehensive rather than piecemeal solution.
- · In terms of process, the Government plans to introduce legislation through the Finance Bill this Autumn, ensuring legislation is in place well ahead of implementation in 2028.
BRC Action
Whilst it was good to see some recognition of our point on intervening quicker, it was disappointing this only meant a reduction of 6 months. We will continue to push for as quick implementation as possible, remembering the Government is stressing October 2028 is the latest possible date. We will also review the final response to the consultation to ensure our comments are reflected in the draft legislation introduced in the Finance Bill in the Autumn.
