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UK Budget 2026: Customs Changes
Updated: 4 days ago
🔓The UK Budget advances low-value import reform and announces changes to customs enforcement, origin certificate fees and trader reporting.
What changed?
The UK Budget 2026 introduces several changes affecting the cost and administration of international trade.
The government plans to remove the ÂŁ135 customs duty relief for low-value imports and introduce new customs arrangements by October 2028. The detailed arrangements will determine how businesses handle affected consignments.
From 1 October 2027, online marketplaces will become responsible for collecting VAT on qualifying sales by UK businesses. The extension applies to VAT-registered businesses and businesses with annual sales exceeding ÂŁ90,000 on an individual platform. Personal sales, second-hand goods and business-to-business transactions are excluded.
The UK Budget 2026 confirms that the removal of the ÂŁ135 customs duty relief for low-value imports will be implemented by October 2028 at the latest, six months earlier than previously planned. The reform will bring new requirements for customs data, payments, compliance and enforcement.
It will also introduce fiscal representatives, who will assume joint and several liability for customs debts arising from relevant low-value import declarations. Detailed operational rules will follow through secondary legislation and public notices.
Three further customs measures were announced.
HMRC will receive targeted powers to dispose of certain goods seized as liable to forfeiture where storage or handling is impractical or would incur unreasonable expense.
The Finance Bill 2026-27 will validate fees charged in connection with issuing Certificates of Origin.
The government will also introduce a route for reporting harmful behaviour by intermediaries and traders.
For the UK Carbon Border Adjustment Mechanism (CBAM), the UK plans to introduce country-specific default emissions values are planned from 2029. These will replace the initial global default values used in 2027 and 2028.
The Budget also provides for tariff suspensions covering 72 products from 5 August 2026 and extensions to existing suspensions covering 361 products in 2027-28.
Who is affected?
E-commerce businesses, online marketplace operators and importers handling low-value consignments need to assess the customs changes. UK businesses selling through online marketplaces should determine whether the new VAT rules apply.
Businesses involved in obtaining or issuing Certificates of Origin should monitor the fee legislation. Traders and intermediaries should follow the development of the new reporting route. Businesses handling goods seized by HMRC may be affected by the revised disposal powers.
Importers of goods covered by UK CBAM should assess their exposure to the emissions reporting and charging regime. Manufacturers importing materials potentially eligible for tariff suspensions should review the relevant product scope.
Why does it matter?
These measures affect traders differently.
The low-value import reform is more than the removal of a duty relief. It changes the planned framework for declaring, paying for and controlling low-value imports. The accelerated timetable gives affected businesses less time to prepare than under the previous schedule.
The VAT extension creates a separate issue. Marketplace collection does not remove every VAT obligation a business may have. Sellers need to understand which transactions fall within the new rules and how marketplace accounting interacts with their existing VAT arrangements.
For CBAM goods, the move to country-specific default values could change the emissions values applied to imports from different origins. Businesses relying on default values should assess whether reliable product and emissions data could affect their exposure.
Tariff suspensions offer a different opportunity. Eligible goods may benefit from reduced or suspended customs duties, but eligibility depends on the product and the applicable measure.
Fiscal representation also introduces a potential customs debt exposure for the UK-based representative. Sellers, marketplaces and intermediaries will need to understand how these responsibilities affect their commercial arrangements.
The other measures address narrower issues. Disposal powers may reduce unnecessary storage costs, while the Certificate of Origin legislation clarifies the legal basis for relevant fees. The reporting route offers a new channel for raising concerns about harmful behaviour.
What should you consider?
E-commerce: Which sales channels and fulfilment models could be affected by the new customs arrangements, and does the marketplace VAT threshold apply to your business?
Industrial imports: Are your goods within the UK CBAM scope, and can you obtain reliable emissions data for the relevant country of origin?
Customs duty: Do your imported products qualify for an existing or proposed tariff suspension, and could an application reduce your duty costs?
Liability and costs:Â How could fiscal representation, declaration data and payment arrangements affect contracts, operating costs and customs debt exposure?
Other HMRC measures:Â Do you need to monitor Certificate of Origin fees, the handling of seized goods or the forthcoming reporting route?
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