Since the summer, UK music companies have faced new charges to export to the EU. Here, UK Music chief executive Tom Kiehl and AIM deputy chair Tony Morley urge the government to act with independent labels being hit especially hard by the new cost on physical music sales to the bloc…
Is summer in the UK becoming predictable? Over the last 10 years we have experienced countless heatwaves, several changes of Prime Minister and England coming very close to, or in the case of the Lionesses, winning major international football tournaments during the summer months.
A further sense of Groundhog Day is given by our £8 billion music industry facing another significant challenge in exporting music to the EU.
While a decade ago the sector faced the reality of the EU referendum result presenting unforeseen obstacles to its biggest and closest market, July and August 2026 have brought new problems for many music companies in our influential independent sector and their potential to grow our £4.8 billion export revenues.
On 1st July of this year, the EU introduced a new flat €3 customs fee per product type on small parcels with Royal Mail charging handling fees on top. While all industries that export are navigating these changes, there are particular pressures for music companies given the increasing importance of selling direct to music fans across the EU.
The UK government has recognised the importance of the creative industries in driving UK growth, placing them at the heart of its industrial strategy, and has recently published its policy roadmap, titled Turn It Up – A Plan For Music. To unlock growth, the government needs the UK music industry to export and deliver tax revenue, yet these changes impact its ability to do that.
The EU has a population of 452 million and their appetite for UK acts is high. From Arctic Monkeys, Pulp and Ezra Collective, to Floating Points, Jorja Smith or Arlo Parks, UK independent artists are popular across the EU, and less well-known artists work hard to build fanbases in Europe through touring, festival appearances and showcase events.
Artists trying to break through, whether domestically or internationally, need ways to cement their relationship with fans in order to break through, gain sufficient returns on investment and build long-term careers, with direct-to-customer sales of vinyl albums, CDs and other merchandise such as T-shirts growing in importance. Many smaller independent labels rely on direct physical sales for a significant portion of the income they need to invest in and support artists.
All of this adds to costs of business, meaning less to invest in the next generation of artists, hire staff or pay taxes
Tom Kiehl & Tony Morley
Before the recent changes, EU customers benefited from what’s known as a ‘de minimis exemption’, meaning they avoided having to pay customs duties on packages valued at less than 150€.
The exemption has now been removed and the new fees added. The fees are too high to be absorbed by sellers on lower value items without suffering losses, and the only mechanism currently available to cover these fees being significantly increased postage and packaging prices passed onto the customer.
Coming on top of changes to VAT rules in 2021, managed through the IOSS (import One Stop Shop) scheme which added significant business costs to sellers, as well as ever-increasing postage rates since the pandemic, EU music fans now often find themselves presented with costs that exceed the value of the merchandise itself.
If someone in Germany or France buys three different types of product from the UK related to their favourite artist, say a vinyl record, T-shirt and poster, this will result in €9 of extra costs, plus a £1 handling fee. This acts as a huge disincentive and will mean the Germans and French will more likely save their Euros than spend on music shipped from the UK .
This is not to mention the increased administrative burden on sellers to comply with the new rules, which smaller companies in particular can find it hard to navigate.
Each EU country is implementing the new rules in different ways, so sending a package to, for example, Greece, requires a different mechanism to a package sent to Germany. This results in returned packages and frustrated customers obliged to pay additional fees on receipt. All of this adds to costs of business, meaning less to invest in the next generation of artists, hire staff or pay taxes.
Taken at scale, the negative impact of new customs changes is hugely damaging. Direct-to-consumer sales now make up 13.6% of all physical albums sold, a 2.1% year on year increase.
This year it was reported that annual physical music revenue totalled more than £250 million in the UK for the first time in eight years, as the vinyl market rose by 19.9% year-on-year, and CD revenue also grew by 3.1%.
Furthermore, the status of selling via direct-to-consumer marketplaces is increasing, with sales through Bandcamp now eligible for the official charts, as well as other platforms.
The customs changes are likely designed to level the playing field for EU sellers in an attempt to help them compete with cheap imports from other countries, but it doesn’t take into account that music is not generic and interchangable. And, while larger operators like Amazon (and indeed the likes of Temu) are able to navigate these challenges by virtue of scale, it is smaller companies that are particularly at risk.
The UK’s homegrown independent labels are particularly vulnerable to the changes. This is because the retail value of a poster or CD is often relatively small in the first place, with music fans also not tending to buy multiple copies of the same record or product.
The new customs fees represent a much greater proportion of the total cost in any music direct-to-consumer transaction than for many other products. Higher value products and sales that are now also subject to these customs duties for the first time are effectively being given a preferential rate in contrast.
While the 1 July customs changes are a serious problem for the UK’s music, there is concern from music companies that the situation is about to get even worse. The €3 customs fee is a temporary measure, with additional costs anticipated in November 2026 (an additional 2€ customs handling fee) as well as increased data collection requirements.
The current scheme will then be superseded in 2028 by full EU Customs Reform, with fees based on the value of items shipped. While this is still subject to EU legislation, this is likely to further penalise UK music companies, particularly affecting the smallest in the sector.
We need a concerted effort from the UK government to secure an exemption for music products at future summits
Tom Kiehl & Tony Morley
Under the Brexit Trade and Cooperation Agreement (TCA), music items should be exempt from customs duty, but the current actions and the plans for a new ‘simplified’ customs arrangement appear to disregard this.
All of this is deeply damaging to the music industry, impacting the ability of musicians, and the homegrown labels and related companies that invest in and support them to make a living. After repeated blows, many are simply ceasing to trade with the EU as it becomes too complicated and expensive.
The situation is without precedent for music companies. When the US abolished de minimis rules in 2025, music products remained exempt. We therefore need a concerted effort from the UK government to secure an exemption for music products at future summits. Such an approach would protect music exports and encourage the free trade in goods that we have all previously enjoyed.
In the aftermath of Covid shutdowns on top of Brexit, the music sector has, quite rightly, had to focus its attention on reconfiguring EU touring. But there has been substantially less discussion around export barriers.
This new customs issue, on top of the other post-Brexit obstacles, further underlines the complexities of being a ‘third country’ where not enough has been done to support culture.
We have hope however, with renewed emphasis on growth in the Music Plan and refreshed intent within government.
Hamish Falconer, the new minister responsible for the dialogue with the EU, recently stated the government’s desire for a deeper post-Brexit relationship, cultural exchange and tackling impediments to this. Lord Sonny Leong, the new minister for small businesses, has a track record of pushing for work to address post-Brexit red tape facing small businesses.
The ball is now in the government’s court to act fast to make sure these dark days for the UK’s music industry feel less like an EU Groundhog Day and more like a rare solar eclipse.
Tom Kiehl is the chief executive of UK Music and Tony Morley is deputy chair of AIM (Association of Independent Music) and MD of The Leaf Label.
IMAGE: Olena Malik/Getty
