The UK Just Copied the US on De Minimis

Here’s What It Means for Your 2026 Plan

If you’ve been paying attention to cross-border policy over the past eighteen months, this latest announcement from the UK government will feel familiar:

The Treasury has confirmed that the country will phase out the current relief on low-value imports. Parcels under £135 will not be able to glide into the UK without customs duty for much longer.

In isolation, that sounds like a small line in a budget speech. In reality, it’s the next step in a pattern that began in the US, is accelerating in the EU, and is now arriving in the UK. It’s also the starting pistol for a series of operational and commercial decisions that your 2026 plan probably does not currently account for.

This piece is not about the politics.

It’s about what this shift does to margins, to logistics, to systems, and to the way ecommerce teams operate when the rules of cross-border trade change faster than internal processes do.

In short, it’s about practical consequences that will show up in your P&L long before the news cycle moves on.

What actually changed

The UK has stated it will remove the low-value exemption by 2029 at the latest. Some sources indicate a much earlier date and point to 2026 as the real moment to watch. Either way, the direction of travel is clear. The rules that allowed small parcels to bypass duty are being wound down.

What matters isn’t the exact month the rule disappears. What matters is the inevitability of the shift.

The UK is aligning itself with the pattern already unfolding elsewhere. In August the US ended its equivalent exemption on goods under eight hundred dollars. The EU will remove its threshold in 2028 and is actively considering a faster route. If you ship cross-border in 2026, you should expect a world where duty applies on almost everything, regardless of ticket price.

Some retailers hoped for clarity or a slower, more consultative process. The reality is that governments in large markets are tightening the rules at a pace that leaves very little room for complacency. From their perspective, low-value leakage is too large to ignore and too politically visible to leave untouched. That is the backdrop for whatever comes next.

Why this matters more than the headlines suggest

There is a comforting idea that tariff shifts only hurt platforms that ship enormous volumes of low-value parcels. The truth is more complicated. Any business that depends on cross-border demand will be affected because duty is only one part of the equation.

The real challenge sits inside your operational stack.

The first hit arrives through landed cost accuracy. Many teams still calculate duties through a mix of spreadsheets, carrier tables, assumptions and a bit of luck. That approach barely works today and it certainly will not survive a regulatory environment where tiny differences in classification or routing create cost swings across thousands of orders.

The second hit is margin volatility. Duty on a twenty pound item does not sound like a big deal until you multiply it by a month’s worth of orders and add the carrier fees, the admin charges and the extra handling friction that creeps into every return. Once that happens, your cross-border channel suddenly looks less like a growth lever and more like a very expensive habit.

The third hit is the knock-on effect of customs congestion. If the UK introduces duty on all small parcels, courier networks will be forced to process more declarations, more labels, more checks and more exceptions. That creates delays. Delays create unhappy customers. Unhappy customers create higher cancellation rates and higher return rates. It all lands in the same place: reduced profitability.

Taken together, these factors form a pattern. Tariffs are only the spark. The operational reality is the fire.

The echo of the US experience

The US shift is useful because it gives us a rough outline of what might happen elsewhere. When the exemption disappeared, courier networks were hit hard. Processing times stretched. Duty invoices became inconsistent for weeks. Some shipments were cleared without issue while others were held without warning. Teams that relied on stable lead times suddenly had no predictability.

Retailers quickly discovered that the issue was not the tariff itself but the shock to the system. The infrastructure was simply not built for the volume. That shock created chaos throughout the supply chain and it took time to settle.

The UK and EU will not be immune to the same pattern. The volumes are enormous. The oversight is fragmented. The systems are not fully unified. When customs regimes shift, everything else has to catch up and it rarely happens cleanly.

Who this affects first

The impact is uneven. Large enterprises with established regional hubs will absorb the change with fewer issues. They already have inventory sitting inside the market where the customer lives, so duty is baked into the structure.

The brands most exposed follow a different model. They rely on shipping directly to consumers across borders in order to keep inventory centralised. That model works when tariffs are forgiving. It becomes fragile when tariffs tighten.

Then there are the brands that have just begun to expand beyond their home market. They usually test international growth through direct fulfilment. It is sensible because the investment is small and the risk low. A universal duty regime raises the cost of that testing phase. For some, it will be enough to slow down or pause their geographic expansion entirely.

Your two strategic options

Every brand that ships cross-border eventually faces the same fork in the road. The coming tariff environment does not create new choices. It simply forces you to confront the ones that were already there.

Option one: withdraw from the market.
Nobody likes to say it out loud, but it is a legitimate strategy. If the cost of serving a region outweighs the commercial upside, or if your price point cannot absorb duty without damaging conversion, pulling back is sometimes the most rational decision. It is painful. It is political. But it is still a choice.

Option two: keep shipping cross-border and accept the duty overhead.
This is the default path because it looks cheap. It does not stay that way. Once you factor duty, carrier fees, handling charges, return friction and customer confusion, your lightweight model quietly becomes the most expensive version of international expansion.

Option three: establish a regional distribution centre.
This is the opposite of lightweight. The investment is real. The operational shift is significant. But for brands with sustained cross-border demand, it is usually the point at which delivery speed improves, customs friction disappears and margin volatility stabilises. It also removes the constant threat of regulatory surprises destroying your unit economics overnight.

You can delay the decision.
You cannot avoid it.

What you should do this week

You do not need a full cross-border transformation programme today. You do need clarity. The first step is to quantify your exposure. Identify how many parcels you ship into the UK and EU under the current low-value threshold. Establish the actual landed cost impact if duty applies on every one of those parcels. Most teams are surprised at the size of the number.

Next, check the accuracy of your HS code assignments. If they are incomplete or inconsistent, you need to address that. Nothing drives unexpected cost like misclassification.

Finally, review your checkout logic. Many brands underestimate how confusing cross-border fees appear to customers when tariffs shift. You need transparency before you need sophistication.

What you should do this month

Once your exposure is clear, pressure test your systems. Can your ERP, OMS and carriers handle a world in which every order requires a declaration and calculation? Can your warehouse team manage a higher rate of exceptions? Can your support team articulate the difference between VAT, duty and carrier fees without creating more confusion for the customer?

These questions sound basic but they contain the seeds of your margin performance for the next two years.

You should also begin modelling the cost of a small regional hub, even if you have no current intention of opening one. Pressure testing options now buys you time later. The worst moment to explore a new fulfilment model is the moment you are already losing margin.

What you should do this quarter

The final step is strategic. Cross-border is only one of the three levers brands can pull to grow. The other two are channel expansion and product diversification. Each carries its own operational weight. Once tariffs tighten across Western markets, growth becomes more expensive. That means you need to decide where to invest. It is better to make that decision early than to be pushed into it by rising delivery costs.

You should expect this topic to feature in every credible January planning conversation. Boardrooms will want to know whether their cross-border channels are safe, whether costs are stable and whether the current operational model can handle the next regulatory cycle. The companies that arrive at those conversations with data and options will be fine. The companies that show up with guesswork will not.

The bigger picture

Tariff changes are not random. They are part of a global shift away from generous assumptions about low-value imports. The UK announcement is simply the next step. The brands that succeed over the next decade will not be those that wait for legal certainty. They will be the ones that build flexibility into their operational architecture and make decisions before the headlines tell them they have no choice.

The UK has copied the US. The EU will follow. The timeline is not the interesting part. The interesting part is how quickly leadership teams are willing to act.

You do not need to panic.

You do need a plan.