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Customs Duty Changes Will Reshape UK Retail Competition in the Coming Years

· Posted on: January 28th 2026 · read

The UK retail market could be on the brink of a major shift. The government is consulting on removing the current customs duty relief for goods under £135 - a rule that has given overseas sellers significant advantage for years. The latest date for the change is March 2029, but it’s worth paying attention now. Why? This could reshape the competitive landscape for UK retailers and global e-commerce players.

Why Does This Matter?

Currently, some global platforms can ship low-value goods into the UK without paying customs duty. That means they can keep prices ultra-low, making it tough for UK retailers to compete. Removing this relief would level the playing field and close gaps that enable possible undervaluation and tax leakage.

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This move also aligns the UK with global trends. The EU is phasing out its €150 threshold, and other markets are tightening rules on low-value imports. It’s part of a bigger story: governments worldwide are rethinking how cross-border e-commerce is taxed and acting to protect their own retailers from cheaper competition.

A Trend to Watch for 2026 and Beyond

"Full implementation may be a couple of years away, but businesses should start planning now. The consultation could accelerate the timeline, and the direction of travel is clear: stricter rules on low-value imports are coming. Affected retailers should factor potential duty costs into pricing models and review sourcing strategies."

"This isn’t just a UK issue, rather it’s part of a global tightening of e-commerce regulation. Expect more scrutiny on parcel declarations and possible admin fees. For retailers, agility will be key."

Sue Rathmell, Partner

What Could Change for Pricing and Consumers?

When the threshold goes, overseas sellers will face extra costs in terms of customs duty and compliance. That will mean higher prices for imported goods and fewer “ultra-cheap” options for consumers. UK retailers may finally see the price gap narrow, therefore creating an opportunity to win back customers with quality, service, and sustainability.

Marketplaces will also feel the impact. Platforms will need to collect more data, appoint UK representatives, and manage new compliance processes. These costs will ripple through supply chains and could affect delivery times and product availability.

So, What Should Businesses Do?

Engage in the consultation, as industry voices matter and help shape the timeline. You can find the consultation here
Run scenarios to model the impact of customs duty on imports and adjust pricing strategies.
Communicate value and highlight what makes you different i.e. quality, reliability, and sustainability.

Even if the change takes time, the direction is clear: tighter rules on cross-border trade and a push for fairer competition. Businesses should factor this into long-term planning, whether that means diversifying suppliers, investing in UK production, or doubling down on customer loyalty.

MHA’s Industry Predictions for 2026

"Removing the £135 threshold isn’t just a technical change. It’s a structural shift that could redefine retail competition. For UK retailers, it’s a chance to reclaim ground, and for all businesses, it’s a reminder that the future belongs to those who plan ahead."

Andrew Thurston, Partner