If you are a United Kingdom e-commerce business sending consignments to the European Union, be aware that the traditional duty-free threshold for small parcels is being abolished.
A new flat-rate duty will come into force on 1 July for low value shipments.
At present, small parcels valued at less than EUR 150 enter the EU duty-free. It’s a threshold that online traders are aware of.
New customs duty
The EU intends to remove the duty-free exemption for small parcels altogether. All consignments under EUR 150 will be subject to a flat-rate customs duty of EUR 3 from 1 July 2026 to 1 July 2028.
This rate will be applied to all goods entering the EU, for non-EU sellers registered with the EU’s import one-stop shop (IOSS) for VAT purposes. It applies to the ‘line item’ category, not the parcel.
For example, if a parcel contains one shirt and two hats (with the whole parcel valued less than EUR 150), it is treated as containing two distinct items, and EUR 6 in customs duty should be paid.
If a parcel contains multiple types of item categories, the duty will stack. The rate may be extended to goods entering the EU sold by traders not registered with the IOSS.
In addition to this flat rate duty, a handling fee is currently under discussion, and if agreed, is expected to be in place from November 2026.
Checklist
In summary, consider
– What types of goods you export
– Is your business registered for IOSS
– What is your typical order volume to the EU
What’s behind the changes?
The EU is phasing out the old de-minimis system to combat undervalued shipments, ensure product safety / associated environmental issues, and combat fraud.
Longer term change
A wider package of customs reforms will include a new customs data hub. This is due to become operational in 2028. The interim customs duty introduced in 2026 will potentially be replaced by normal customs tariffs.
Further information
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