Red tape, rising costs, and complex rules are pushing small firms out of EU markets, new research by the Federation of Small Businesses (FSB) has warned.

The FSB’s data shows that 34% of SME traders expect to reduce or stop EU trade altogether if current rules do not change.

Meanwhile, 45% expect to maintain current trading levels and only 6% see an opportunity to grow trade with the EU under the existing arrangements.

The FSB says compliance costs are also eating into margins, with 34% facing expenses of more than £5,000 a year.

Disruption at the border is common, with firms reporting goods being turned away or held up, resulting in unpredictable delivery times and damage to customer relationships.

Tina McKenzie, Policy Chair at the FSB, 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.

‘This isn’t complicated – a de minimis deal, an SPS agreement, simpler VAT rules and our other recommendations could unlock so much potential. They would take pressure off small firms and give them the breathing space they need to grow.’

Internet link: FSB website