Small businesses are being driven out of EU markets by red tape, rising costs and complex trading rules, according to new research from the Federation of Small Businesses (FSB).
Its report found that 34% of SME exporters expect to reduce or stop EU trade altogether if current arrangements remain in place, while just 6% see opportunities to grow. Nearly half (45%) expect to maintain existing levels.
Firms point to mounting administrative burdens, with one business reporting it spends more than half its time on trade paperwork. More than a third (34%) face compliance costs exceeding £5,000 a year.
Barriers are widespread, with 63% of small firms reporting significant challenges. Among importers and exporters, 85% have encountered issues, most commonly with customs documentation, inspections and product labelling. VAT rules are also a major hurdle, with 75% reporting difficulties.
The FSB is calling for reforms including a digital customs system, mutual recognition of standards, and a low-value trade deal to cut costs.
FSB policy chair Tina McKenzie said: “With growth at the top of the agenda, now is the time to get EU trade working for small firms.
“Small firms are not short of ambition but they’re being worn down by a system that feels stacked against them. Many want to grow into EU markets, but don’t have time to be swallowed by paperwork, creeping costs and delays that put hard-won customer relationships at risk.
“The demand is there and the opportunity is clear, so it’s a frustrating shame that many are currently questioning whether it’s even worth the effort at all.”