Will the Budget Affect Cheap Imports? What Small Ecommerce Businesses Need to Know

For years, a specific tax rule has allowed small ecommerce businesses and dropshippers to import goods into the UK relatively cheaply. But following the Chancellor’s announcement on 26 November 2025, the landscape is changing. If you are asking, “Will the budget affect cheap imports for my business?”, the short answer is yes—but perhaps not immediately.

The Autumn Budget 2025 has confirmed plans to close the “loophole” that allows low-value goods to enter the UK duty-free. For accounting clients and online retailers, particularly those relying on dropshipping or direct-from-China supply chains, this is a critical pivot point.

The End of the £135 “De Minimis” Threshold

Currently, goods imported into the UK with a value of £135 or less are exempt from Customs Duty (though VAT is still due). This relief was originally designed to reduce administrative friction for small gifts and low-value items. However, with the explosion of platforms like Shein and Temu, the government has argued this puts high street retailers at a disadvantage.

The Chancellor has announced that this relief will be removed by March 2029 at the latest. While the change isn’t overnight, the direction of travel is set.

• What is changing? The “Low Value Consignment Relief” on customs duty will be scrapped.
• The Goal: To ensure that a t-shirt sold by a UK high street shop and one shipped directly from a factory in Shenzhen are taxed equally.

How Will the Budget Affect Cheap Imports for Dropshippers?

If your business model relies on the “direct-to-consumer” (dropshipping) method from overseas suppliers, you are in the crosshairs of this policy.

1. Squeezed Margins

Once this measure kicks in, will the budget affect cheap imports‘ pricing? Absolutely. You will likely have to pay Customs Duty on every item, regardless of value. Even if the duty rate is low (e.g., 2-12% depending on the product), it eats directly into the thin margins typical of high-volume dropshipping.

2. Administrative Headaches

The government is consulting on a new system to handle this, but it will almost certainly involve more paperwork. Currently, low-value parcels breeze through customs. In the future, every parcel may require a more detailed declaration.

• Risk: If your logistics partner (or supplier) doesn’t handle this data correctly, goods could be held at the border, leading to angry customers and refund requests.

3. Liability Shifts

The consultation suggests that “online marketplaces” may bear more responsibility for compliance. If you sell via your own Shopify store rather than a marketplace like Amazon, you are the retailer. You may need to ensure your suppliers are providing the correct data to carriers to avoid your customers being hit with unexpected bills at their doorstep—a guaranteed way to kill repeat business.

The “Silver Lining” for Stock-Holding Brands

If you are a UK-based ecommerce brand that imports goods in bulk and holds stock in a UK warehouse, this news is actually positive.

• Level Playing Field: You have always paid Import Duty on your bulk shipments. Your overseas competitors shipping single units duty-free were effectively getting a tax subsidy you didn’t get.
• Competitive Pricing: As dropshippers are forced to raise prices to cover the new duties, your domestic stock becomes more price-competitive.

Conclusion: Actionable Steps for 2025

So, will the budget affect cheap imports enough to change your strategy? Yes. Although the final implementation is slated for 2029, the “consultation” phase means the rules are being written now.

Steps to take:

1. Review Supply Chains: If you rely 100% on duty-free dropshipping, start calculating your landed costs with an added 5-10% duty buffer to see if the model remains viable.
2. Consider Bulk Importing: Moving to a bulk-import model (holding stock in the UK) might now be safer. You gain control over shipping speeds and avoid the risk of individual parcels getting stuck in a stricter customs net.