The UK eCommerce market gives businesses access to customers around the world. However, selling products internationally also creates additional responsibilities around VAT, customs, pricing, cash flow and record keeping.

For eCommerce businesses importing or selling goods into the UK, understanding low value imports UK rules is particularly important. The £135 threshold has historically been an important point when determining how VAT and customs requirements apply. However, businesses should also be aware that the UK government announced reforms in July 2026 to remove the £135 customs duty relief and introduce new arrangements for low-value imports.

This means eCommerce businesses should review their financial and operational processes rather than relying on older assumptions about low-value shipments.

What Are Low Value Imports in the UK?

Low-value imports generally refer to goods imported into the UK in consignments with an intrinsic value of £135 or less.

For VAT purposes, the £135 threshold remains important under the current rules. The threshold applies to the total intrinsic value of the consignment, rather than automatically applying separately to every product inside the shipment.

The intrinsic value generally means the selling price of the goods, excluding separately stated transport, insurance and certain taxes or charges.

For example, if an order contains three products worth £50 each and they are shipped together as one consignment, the relevant value may be £150 rather than £50 per item.

This distinction can affect the VAT and customs treatment of an order.

How UK VAT Currently Applies to Low-Value Imports

For goods located outside the UK when sold directly to UK consumers, consignments valued at £135 or less are generally subject to UK VAT at the point of sale rather than import VAT being collected when the goods enter Great Britain. Overseas sellers may therefore have UK VAT registration and accounting obligations.

Similar rules can apply when goods are sold through online marketplaces. In qualifying circumstances, the marketplace is responsible for charging and accounting for the VAT.

For consignments above £135, normal import VAT and customs rules generally apply.

Businesses should therefore make sure their systems can identify the correct treatment before an order is dispatched.

The £135 Customs Duty Rule Is Changing

One of the most important developments for businesses in 2026 is the government's announced reform of low-value imports.

HMRC published a policy paper in July 2026 proposing to remove the £135 customs duty relief and introduce new customs arrangements for low-value imports. The reforms are intended to introduce new requirements covering data, payments and compliance.

For eCommerce businesses, this means historical assumptions such as "orders under £135 are always free from customs duty" should not be relied upon when planning future costs.

Businesses should monitor implementation dates and update their systems, pricing models and import procedures accordingly.

1. Review Your Product Pricing

Low-value import rules can have a direct impact on product profitability.

When calculating selling prices, consider:

• Product purchase cost
• International shipping
• Insurance
• VAT
• Customs duty where applicable
• Customs clearance fees
• Marketplace fees
• Payment processing charges
• Warehousing costs
• Returns
• Currency conversion costs

A product that appears profitable based only on its purchase price may have a much smaller margin after all import-related costs are included.

eCommerce businesses should therefore calculate the landed cost of products before setting retail prices.

2. Build a Landed Cost Model

A landed cost model helps businesses understand what each imported product actually costs.

For example:

Product cost + shipping + insurance + customs costs + import-related charges = Landed cost

Businesses can then compare the landed cost with their selling price to determine the actual gross margin.

This becomes especially important when importing products from multiple countries because customs treatment, shipping costs and currency movements can vary.

3. Review Your VAT Processes

VAT mistakes can quickly become expensive for growing eCommerce businesses.

Your accounting system should distinguish between:

• UK domestic sales
• Low-value imports
• Imports above the relevant threshold
• Marketplace sales
• Direct website sales
• Business-to-business sales
• Sales to Northern Ireland
• Sales to other countries

For qualifying low-value consignments, sellers may need to charge UK VAT at the point of sale. For sales above £135, normal import VAT and customs rules generally apply.

Your bookkeeping process should record the correct VAT treatment for each transaction.

4. Understand Marketplace Responsibilities

Many eCommerce businesses sell through platforms such as online marketplaces.

In qualifying circumstances, marketplaces can become responsible for charging and accounting for VAT on low-value goods sold to UK customers.

However, businesses should not assume that the marketplace handles every tax responsibility.

You should understand:

• Who collects VAT
• Who reports VAT
• Which VAT rate is being applied
• How marketplace fees are treated
• What information appears on settlement reports
• How transactions are recorded in your accounting software

Accurate reconciliation between marketplace statements and accounting records is essential.

5. Prepare Your Accounting Software

Your accounting software should be capable of handling the different transaction types created by international eCommerce.

Useful features include:

• VAT tracking
• Multi-currency accounting
• Inventory management
• Marketplace integration
• Automated transaction imports
• Expense categorisation
• Sales reconciliation
• Digital record keeping

Businesses should also review how their software handles VAT when orders cross the £135 threshold or when different products are combined into a single consignment.

Good bookkeeping is particularly important because sales data, import documentation and VAT records need to agree.

6. Strengthen Your Inventory Management

Import costs are closely connected to inventory.

If you import large quantities of stock, consider:

• Average landed cost
• Stock turnover
• Storage costs
• Slow-moving products
• Supplier lead times
• Reorder points
• Currency fluctuations
• Import-related charges

Accurate inventory records help businesses avoid selling products below their true cost.

For growing eCommerce companies, inventory accounting should be connected with sales and purchasing data wherever possible.

7. Review Your Supply Chain

Businesses should also examine where their goods are manufactured, stored and dispatched.

For example, a business may:

Supplier overseas → UK warehouse → UK customer

Or:

Supplier overseas → Customer directly

These models can have different VAT, customs and operational consequences.

Direct-to-consumer international fulfilment can reduce UK warehouse requirements but may create more complex VAT and customs processes.

UK-based inventory can improve delivery times but may increase storage and import costs.

The best model depends on product margins, sales volumes and customer locations.

8. Prepare for Changes in Customs Costs

The proposed removal of the £135 customs duty relief means businesses should avoid building long-term pricing models around the assumption that low-value consignments will always receive customs duty relief.

Businesses should create scenarios such as:

Best case: Lower customs and fulfilment costs

Expected case: Moderate increase in import costs

Worst case: Higher customs, handling and compliance costs

This type of scenario planning allows businesses to understand how changes could affect profit margins.

9. Keep Accurate Import Records

Good documentation is essential for international eCommerce.

Keep records of:

• Supplier invoices
• Commercial invoices
• Customs declarations
• Shipping documents
• Product descriptions
• Commodity codes
• Import VAT information
• Customs duty information
• Marketplace statements
• Customer invoices
• VAT records

HMRC guidance also requires businesses to maintain appropriate VAT records. For marketplace VAT arrangements, relevant records can include VAT invoices and sales information.

Well-organised records make bookkeeping, VAT returns and compliance checks easier.

10. Watch Your Cash Flow

Importing stock can create significant cash-flow pressure.

You may have to pay suppliers before receiving customer payments. At the same time, you may have to pay shipping, customs, VAT, warehouse and fulfilment costs.

This creates a gap between:

Cash going out → Stock arriving → Products being sold → Customer payments coming in

A cash-flow forecast can help businesses identify periods where additional working capital may be required.

Growing eCommerce businesses should regularly review:

• Inventory investment
• Supplier payment terms
• Customer payment timing
• VAT liabilities
• Import costs
• Shipping costs
• Marketplace settlement periods

11. Review Your Product Classification

Correct product classification is important when importing goods.

Businesses should make sure they have appropriate commodity codes and accurate product descriptions.

Incorrect classification can result in incorrect customs treatment and unexpected costs.

If your product range is large, maintaining a central product database can make customs and accounting processes more consistent.

12. Plan for Northern Ireland Separately

Businesses selling to Northern Ireland should not automatically apply Great Britain rules.

Northern Ireland has specific VAT and customs arrangements, particularly for goods moving between Northern Ireland, Great Britain and the EU.

For example, HMRC guidance confirms that IOSS can apply to certain low-value goods sold to consumers in Northern Ireland, while it cannot be used for sales of low-value goods to consumers in Great Britain.

Businesses selling throughout the UK should therefore make sure their systems can distinguish between Great Britain and Northern Ireland transactions.

Financial Checklist for eCommerce Businesses

Before importing more stock, review:

• Product landed costs
• VAT treatment
• Customs requirements
• Supplier invoices
• Commodity codes
• Shipping costs
• Marketplace fees
• Inventory records
• Cash-flow forecasts
• VAT records
• Accounting software
• Northern Ireland transactions
• Upcoming customs reforms

Why Bookkeeping Matters for Low-Value Imports

Import accounting is more than simply recording sales and expenses.

A reliable bookkeeping system helps an eCommerce business understand its actual profitability after VAT, shipping, customs, marketplace fees and other costs.

For example, if your accounting records only show a £20 product purchase and a £40 sale, the business may appear to make £20 gross profit.

But after shipping, marketplace fees, VAT and import-related expenses, the actual margin could be significantly lower.

Accurate bookkeeping therefore helps business owners make better decisions about pricing, suppliers, inventory and international expansion.

Final Thoughts

The rules surrounding low value imports UK are important for any eCommerce business sourcing products internationally or selling imported goods to UK customers.

The £135 threshold remains relevant to current VAT treatment, but the government's 2026 customs reform proposals mean businesses should prepare for changes to the treatment of low-value imports.

Businesses can prepare by reviewing their VAT processes, improving bookkeeping, calculating landed costs, strengthening inventory management and monitoring cash flow.

For growing online retailers, professional accounting support can also make international transactions easier to manage. E2E Accounting can help eCommerce businesses organise their accounting, bookkeeping, tax and financial processes so they can focus on growing their online operations while maintaining better financial control.