Small British firms retreating from EU markets due to red tape and costs
A UK body representing small businesses has warned that small firms were being pushed out of European Union markets due to red tape, rising costs, and complex rules, highlighting the continuing effects of Brexit more than six years after the UK left the union.
The research from Britain’s Federation of Small Businesses underlined the challenges of trading with the bloc, despite the current Labour government’s push to reset economic and defence ties at a time of global uncertainty over tariffs and war.
“The EU should be a natural market for our small firms as it’s so close and accessible … it’s a frustrating shame that many are currently questioning whether it’s even worth the effort at all,” FSB Policy Chair Tina McKenzie said in the statement.
Here are the FSB’s findings:
- Three in 10 traders in small- and medium-sized enterprises (SMEs) expect to reduce or stop EU trade altogether if current rules do not change
- Six in 10 small firms trading with the EU have faced significant barriers
- Of those importing and exporting goods, 85 per cent report problems
- The most commonly reported problems include customs documentation, physical inspections of goods, and product marking and labelling rules
- Some 75 per cent of small firms that have engaged with EU value-added tax systems report significant difficulties
- The FSB makes a series of recommendations to improve trading conditions
- These include mutual recognition of product standards between the two sides, a single digital customs system, a new UK-EU de minimis (low-value trade) deal
- They also include export grants of up to 2,000 pounds to help small firms cover the upfront costs and scrapping EU requirements for VAT middlemen