If your business ships goods from the UK into the European Union, an important change is coming on 1 July 2026. The EU is removing the traditional duty-free exemption for low-value imports and replacing it with a mandatory €3 customs duty on low-value parcels. Here is what that means in practice, and what you can do to prepare.
What is changing?
Currently, goods sent to EU consumers with a value under €150 enter the recipient’s country of destination duty-free, though local VAT still applies. From 1 July 2026, that exemption disappears. Every low-value item entering the EU will be subject to a minimum fixed €3 customs levy.
There is an important nuance here. The levy is charged per unique item classification (known as a Commodity Code) rather than per parcel. So if a customer orders a parcel containing a t-shirt, a phone case, and a key ring, that single package contains three distinct product categories and will face a €9 customs charge (€3 x 3), rather than a single €3 fee.
On top of the EU-wide charge, individual Member States can add their own handling fees. France and Italy have already announced additional €2 per-item charges, meaning a single item could accumulate €5 or more in administrative costs before it reaches the customer. Romania has gone further still, introducing an additional handling fee of €5 per parcel.
What does this mean for UK exporters?
For businesses that rely on shipping low-value orders directly from the UK to EU consumers, this change introduces two significant risks.
The first is margin pressure. For lower-priced items under £20, a €3 to €5 fee per item can substantially erode and in some cases completely eliminate profitability. The second is customer experience. If these fees are not handled correctly at checkout, EU customers will encounter unexpected charges at their door, along with additional carrier fees, before their delivery arrives. This creates a chain of avoidable consequences: refused parcels, costly returns, and lasting damage to brand reputation.
How we can help you mitigate the impact
HB&O’s VAT and Global Trade team can help you assess your current position and work through the options available to reduce the impact of these changes. Key solutions worth exploring include the following:
Transition to EU-based fulfilment warehousing: By bulk-shipping inventory into an EU-based warehouse ahead of time, goods clear customs once as a commercial shipment. Individual customer orders are then fulfilled locally within the EU, bypassing the per-item levy entirely.
Smart product bundling: Reviewing your inventory to create bundles of goods sharing the same Commodity Code means shipping multi-packs of the same item category, ensuring only a single €3 fee applies rather than multiple charges for mixed items.
Commodity Code data auditing: A single misclassified product can trigger unexpected fees. Reviewing your product listings and assigned Commodity Codes ensures everything is being shipped under the correct classification.
Delivery Duty Paid and Import One Stop Shop registration: Moving to a Delivery Duty Paid service via Import One Stop Shop (IOSS) VAT registration ensures that all duties and local handling fees are collected transparently at checkout, providing a frictionless customs clearance process and a better experience for your customers.
Importing low-value goods into the UK from overseas
Similar changes are also being introduced in the UK, affecting the importation of goods from overseas. The policy is designed to create a level competitive playing field for UK-based businesses selling domestically, compared to those selling imported stock through platforms such as Shein and Temu.
The £135 low-value consignment relief is expected to remain in place until at least March 2029. However, between the end of December 2026 and that date, certain sectors involved in importing goods into the UK, including online marketplaces, will be expected to begin phasing in the software and process changes needed to collect the relevant data.
If you have questions about how these changes affect your business, our VAT and Global Trade team would be glad to help. Get in touch at [email protected] to discuss your position in more detail.
