CBAM Threshold: Understanding the £50,000 Test

The UK CBAM applies only to importers whose total CBAM-covered imports exceed £50,000 in a calendar year. This is not a per-shipment limit — it is an annual aggregate across all goods in the five CBAM sectors: aluminium, cement, fertiliser, hydrogen, and iron and steel.

The threshold exists to exempt small-volume importers from the reporting and compliance burden. If your total landed value of covered goods stays below £50,000, you have no CBAM obligations.

However, "landed value" is not the same as the price you paid for the goods. HMRC defines it as the total value of the goods at the point they enter the UK, including shipping and insurance costs — essentially the CIF (cost, insurance, freight) value declared on your customs entry.

Test 1: The £50,000 annual value test

You sum the CIF value of every CBAM-covered shipment you import in the calendar year. If the total exceeds £50,000, you are liable. This test is straightforward for businesses with a centralised import ledger. For businesses importing through multiple entities or using several brokers, you must aggregate all imports made by the same legal entity.

If your group has multiple UK-incorporated importing entities, each entity is assessed separately. You cannot group entities to share the threshold.

Test 2: The de minimis goods exclusion

Separately from the value test, individual consignments valued under £500 are excluded from CBAM entirely. This is designed to prevent low-value parcels from creating disproportionate compliance costs. There is no need to count these goods toward your threshold calculation.

• Goods valued under £500 per consignment are excluded
• Consignments sent as "gifts" between businesses are not exempt unless under £500
• The £500 limit applies per consignment, not per item within a shipment

Only goods classified under specific CN commodity codes in the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors count toward the threshold. The complete list of covered codes runs to several pages, but the key categories are:

• Iron and steel: CN chapters 72 and 73 (basic iron and steel, articles thereof)
• Aluminium: CN chapter 76 (aluminium and articles thereof)
• Cement: CN chapter 25 (cement, clinker, lime)
• Fertiliser: CN chapter 31 (fertilisers)
• Hydrogen: CN code 2804.10 (hydrogen)

Goods in these chapters are only covered if they are imported for "consumption" — meaning they enter free circulation in the UK. Goods placed into customs warehousing or inward processing relief are not counted until they are released into free circulation.

CBAM comes into effect on 1 January 2027. The first threshold test covers imports from 1 January to 31 December 2027. HMRC expects you to monitor your imports throughout the year — you do not wait until December to check.

If you exceed the threshold mid-year, you must register with HMRC within 30 days. Your first CBAM return will then cover the period from the date you exceeded the threshold to the end of the calendar year.

Registration deadline: 31 January 2028 for anyone liable during 2027. If you exceed the threshold in a subsequent year, you must register within 30 days of exceeding it.

Example A: Below the threshold

A small engineering firm imports £12,000 worth of steel bolts (CN 7318) and £8,000 of aluminium brackets (CN 7616) during 2027. Total CBAM-covered imports: £20,000. Below the £50,000 threshold. No CBAM obligations.

Example B: Above the threshold

A construction materials importer brings in £35,000 of cement (CN 2523) and £25,000 of structural steel (CN 7308) by July 2027. Total: £60,000. They exceeded the threshold in July and must register with HMRC within 30 days.

Example C: Close to the threshold

A manufacturer imports £42,000 of aluminium sheet (CN 7606) in January. On current run-rate, they will exceed £50,000 by March. They choose to register proactively rather than risk missing the 30-day deadline.

If you remain below £50,000 in a calendar year, you have no CBAM registration, reporting, or payment obligations for that year. However, you must continue monitoring. If your imports increase in a subsequent year and you cross the threshold, CBAM obligations apply from that point.

There is no penalty for being below the threshold. There is a penalty for failing to register within 30 days of exceeding it.