Ticket to Trade
Unlocking growth by making EU trade easier for SMEs
Acknowledgements
In memory of Neil Warwick OBE (1968-2025), Policy Champion for Trade and International Affairs and friend to many at FSB. We remember with gratitude Neil’s expertise, unwavering support and humour over the years.
This report was authored by Kate Foster, Deputy Head of International Affairs. Special thanks to the FSB project team responsible for delivering the report: Lucy Monks, International Affairs Director, Anna Slater, Deputy Head of Media and Communications, and Padraig Blee, Government Affairs Advisor as well as FSB’s policy, public affairs
Who we are
The Federation of Small Businesses (FSB) is the UK’s grassroots business organisation. We are a crossparty non-profit body that represents small business and self-employed members in every nation and region. In 2024, FSB celebrated 50 years of being the authoritative voice on issues affecting the UK’s 5.7 million small businesses, microbusinesses and the self-employed.
FSB is the UK’s largest business group and leading business campaigner, focused on achieving change which supports smaller businesses to grow and succeed. We also provide our members with a wide range of vital business services, helping them to start, run and grow successful businesses through high quality protection and support. This includes 24/7 legal support, financial expertise, training and events, debt recovery and employment/HR advice –alongside a powerful voice heard by governments at all levels.
and media teams in Scotland, Wales and Northern Ireland – particularly Lorna Muldoon, Policy Advisor NI. Thanks also to Julianne Ponan MBE, Policy Champion for Trade in Goods.
The quantitative research was carried out by Verve – the market research agency responsible for administering the survey. The report was designed by Cactus Design Limited – a small business based in Wales. This project would not have been possible without all the FSB members who participated in this research, generously taking the time out of running their small businesses.
Our local, national and international activity helps shape policy decisions that have a direct impact on the day-to-day running of smaller businesses. We work for their interests through research and engagement with our members and by effective campaigning - informing those in power through policy analysis, government affairs, international engagement, and media, communications & public relations. Our advocacy work starts with our expert external affairs team in Westminster, which focuses on UK and England policy issues, the UK Government, Parliament and media and communications engagement. Further to this, our teams in Glasgow, Cardiff and Belfast work with governments, elected representatives and media in Scotland, Wales and Northern Ireland.
Foreword
Small firms are built on entrepreneurial spirit and a willingness to take risks. Trade with markets across Europe should be a natural extension of that spirit. But it often feels harder than it should. Since leaving the EU, the way small firms in the UK trade with Europe has fundamentally changed. There are new processes to learn, new requirements to understand, new forms to fill in.
Our data shows that 34 per cent of SMEs trading with Europe expect to reduce or stop their current levels of trade under the current legal arrangements. It’s positive that 45 per cent of small firms engaged with the EU expect to maintain current levels of trade, but when only 6 per cent expect to increase that trade we know there’s a problem.
This report sets out where that problem sits in UKEU trade and what can be done about it. It focuses on the areas that matter most in practice, from customs and VAT to mobility and regulation, and how these are shaping day-to-day trade with EU markets.
The recommendations are grounded in how the current UK-EU framework works in reality. They focus on improving its implementation, making processes easier to navigate, and ensuring that guidance is clear and consistent across both sides.
In some areas, they also point to where targeted adjustments to the UK-EU relationship could ease pressure and make it simpler for small firms to trade.
The UK and EU remain closely linked markets, but the system needs to work better in practice for small businesses, and the wider economy, to reap the rewards EU trade has to offer.
This report shows how that can be achieved, and we stand ready to work with UK government and EU counterparts to deliver it.
Tina McKenzie Policy and Advocacy Chair, Federation of Small Businesses
Key findings
Across UK SMEs trading with the EU
34%
expect to reduce or stop EU trade if current rules do not change
In the past twelve months:
63%
trading with the EU have experienced significant barriers to trade
85%
exporting or importing goods have experienced significant difficulties
19%
travelling to the EU for work have experienced difficulties taking equipment or goods overseas
75%
that engaged with the EU VAT system experienced significant difficulties
64% of SMEs say their business would benefit from similar rules across both the UK and the EU
Recommendations
Pursue an ambitious course to grow UK-EU SME trade
• HM Treasury should develop new funding for SMEs to support international trade, learning from our competitors’ successful examples, such as the Australian Export Development Grant. This would allow microbusinesses to apply for subsidies of up to a total of £2,000 per year for three years, enabling cash-poor SMEs to offset the upfront cost of activities such as attending trade shows or commissioning market research.
Customs and trade in goods
Deliver small business-friendly digital trade infrastructure:
• HM Revenue and Customs (HMRC) should continue to support the efforts of the International Chamber of Commerce and others to increase the use of digital trade documents, including through establishing digital trade corridors with key trade partners.
• HMRC should seek digital solutions for customs declarations by reviving the Single Trade Window initiative or exploring other routes to streamline the provision of customs data.
Facilitate cross-border flow of commercial samples:
• HMRC and the Department for Business and Trade (DBT) should improve the information and business guidance available on commercial samples exports, including signposting to EU Member State guidance where it exists.
• UK Government should propose a distinct route for moving commercial samples between the UK and EU, looking at examples in Singapore and the United States. UK Government should commit to a robust assessment of existing programmes and propose a pilot scheme.
Ease the burdens of agri-food trade:
• The Cabinet Office and Department for Environment, Food and Rural Affairs (Defra) should devote the political and technical capacity needed to deliver the Sanitary and Phytosanitary (SPS) agreement with the EU so that small firms can benefit by mid-2027.
• Defra should establish a stakeholder working group to allow for constructive discussions and feedback on the SPS agreement. This must include small business representatives, including representatives of SMEs from Northern Ireland.
• UK Government must provide clear timelines, a phased approach and detailed guidance on the SPS agreement. Business organisations must be engaged early to help disseminate relevant information to their networks.
• Defra should work with DBT to amplify business guidance across departmental resources such as the Business Growth Service.
Support UK business on local content requirements:
• If the UK decides to pursue membership of the Pan-Euro Mediterranean Convention on preferential rules of origin, accession must be accompanied by dedicated efforts to provide information and guidance to SMEs.
• UK Government should treat maintaining and expanding the inclusion of UK content in the European Union’s Industrial Accelerator Act as a priority. UK Government should engage proactively with EU counterparts at all levels to maintain a broad definition of ‘European’ content.
Protect SMEs engaging in low-value trade:
• UK Government should propose a groundbreaking new custom ‘de minimis zone’ between the UK and EU to protect SMEs that trade low-value consignments.
• DBT should help SMEs prepare for forthcoming EU changes to the customs treatment of low-value imports, including through resources hosted on the Business Growth Service and signposting to EU Member State information.
• DBT should work with FSB, Royal Mail, fast parcel operators and other business representative groups to raise awareness among businesses of forthcoming changes to the EU’s customs treatment of low-value imports and Member State handling fees.
Mobility
• Ofcom should review the October 2024 changes to its rules and guidance related to roaming. If current practices are failing to protect business travellers from high roaming charges Ofcom should produce more robust guidelines and mandatory caps on charges.
Expand visa-free travel:
• The UK and EU should commit to full implementation of Article 145 of the TCA by improving the provision of information available relating to short-term travel.
• The UK and EU should expand the range of visa-free activities permitted for short-term travel, including allowing remunerated work and reducing professional experience and qualification requirements.
• UK Government should commit to addressing EU concerns around the UK’s rules on permitted paid engagements, including creating a category for service suppliers that does not require sponsorship or English language qualifications.
• UK Government should pursue the mutual recognition of professional qualifications, building on the model of the UK’s Agreement on the Recognition of Professional Qualifications with Switzerland.
Help SMEs navigate temporary export routes:
• DBT and HMRC should work together and with business representative groups such as FSB to identify gaps in existing guidance around temporary export and import of goods to reduce double payment of duties.
Support the creative industries:
• UK Government should progress discussions to facilitate mobility in the creative industries, including visa waivers or an extension of the 90-day limit on length of stay for certain occupations (such as touring artists) and exemptions to current cabotage rules.
VAT
Help SMEs navigate VAT rules:
• HMRC should continue to call for the EU to scrap the requirement for UK businesses to appoint fiscal representatives to benefit from the EU’s Import One-Stop Shop for VAT.
• DBT should improve signposting to business guidance on VAT in relation to cross-border trade, including signposting to trusted Member State sources.
• DBT should also engage bilaterally with key European markets to improve or develop English-language guidance for non-EU businesses.
Regulation
Ease the frictions of regulatory divergence:
• UK Government should implement the recommendations of FSB Northern Ireland’s Windsor Framework Realities report.
• UK Government should pursue the mutual recognition of standards and quality markings as well as the mutual recognition of conformity assessment to allow UK bodies to be recognised as eligible to test products to EU standards.
• UK Government should prioritise maintaining the UK’s adequacy status to allow data flows to continue between the UK and EU. The Department for Science, Innovation and Technology (DSIT) must carry out a robust assessment of the potential impact on adequacy status of any future changes to the UK’s data protection framework.
• UK Government should negotiate a bespoke mechanism for engaging with the EU on policy relevant to the forthcoming SPS agreement. This should allow the UK to participate in relevant European Commission committees or informal Council working groups. UK Government and the EU should look to existing models through which third countries such as Norway participate in EU policymaking.
• Cabinet Office should coordinate proactive cross-departmental engagement with the EU legislative process. Technical and political engagement should begin at the earliest stages of the legislative process to identify files that will impact UK businesses and must include robust consultation with the business community, following the Norwegian model.
• DBT should make it easier for SMEs to find relevant information and guidance on EU regulations, including signposting to Member State information on how to comply with the implementation of relevant EU laws.
A new relationship
The UK-EU Trade and Cooperation Agreement (TCA) is one of the most significant trade pacts in our recent history, underpinning one of the most seismic changes to the UK’s trade relationships. In the five years since the TCA came into effect on 1 January 2021, SMEs have navigated substantial changes to their way of doing business. These changes are not confined to SMEs that buy from and sell to EU customers and suppliers but also affect businesses employing EU nationals or selling EU-originating products and those in Great Britain selling to Northern Ireland. Northern Ireland holds a unique position; part of the UK’s customs territory and internal market yet aligned with many EU goods rules due to the Windsor Framework.
SMEs report struggling with the processes and costs of trading with the EU: almost two thirds (63%) of SMEs engaging in EU trade experienced significant barriers during the past twelve months. These difficulties can be grouped into three broad categories:
• Financial costs such as customs duties, VAT, shipping and intermediary fees, testing costs and other operational costs.
• Administrative burdens including customs and other declarations, proof of origin, mobility and regulatory compliance.
• Knowledge gaps and a lack of support or guidance.
The annual cost of complying with the TCA for SMEs engaged in EU trade outside the value of the goods and services traded – is above £5,000 for 34 per cent of SMEs, with over half (63%) spending more than £1,000. This is a sizeable investment for resource and time-poor SMEs, nearly three quarters of which (72%) say the average value of the items they trade is below £10,000 (see FSB’s 2022 report Customs Clearance).
The cumulation of administrative and financial burdens has had a notable bearing on SMEs’ ability and appetite to trade with the EU. Businesses cite increased costs, unpredictable delivery times and administrative burdens as well as an overall loss of competitiveness compared to EU peers as factors. The volume and complexity of post-Brexit processes and the fear of inadvertently failing to comply with regulations are also powerful drivers.
Opportunities for growth
The UK and EU are major trade partners: in 2024 EU exports to the UK were worth £454 billion and UK sales to the EU were £358 billion6. With both the UK and EU seeking to increase productivity and competitiveness our strong economic relationship and uniquely integrated markets provide a valuable springboard for mutual economic growth.
The UK Industrial Strategy (2025) sets out the UK Government’s plans to deliver sustainable economic growth and productivity, focusing on eight highgrowth sectors forecast to add £152 billion in GVA to the economy annually7 while the EU is pursuing policies to unlock Europe’s competitiveness based on the 2024 report by Mario Draghi8. Smoother crossborder flow of goods, services, data and people between the UK and EU has an important role to play in achieving these growth ambitions. Trade has long been recognised as a driver of productivity and resilience, and growing UK-EU trade will be of mutual benefit to our economies and businesses.
Small businesses are ambitious and eager to participate in EU trade,but need the right environment and support to do so. Just over a third (34%) of all respondents anticipate reducing (25%) or stopping (9%) EU trade if there is no change to current trade arrangements, while only 6 per cent see an opportunity to increase trade into the bloc.
While UK exports to the EU overall have fallen, exporting businesses in the UK’s devolved nations generally continue to perform strongly: the proportion of Welsh export values to the EU was 60.5 per cent in 2024, an increase from 59.3 per cent in 20239, while Northern Ireland reported a trade surplus in 2024 with exports to the Republic of Ireland increasing by 19.6 per cent and to the rest of the EU by 23.5 per cent 10. Almost half (45%) of Scotland’s international exports in 2023 were to the EU, valued at £17.1 billion11
Figure 1: Expected business response if current trading arrangements with the EU remain unchanged12
Source: FSB EU trade survey 2025
The May 2025 ‘reset’ summit and Common Understanding marked a new phase of EU relations, committing both parties to increased collaboration in several areas, but there are further steps that can be taken in pursuit of joint growth. This report sets out how the UK and EU can build on the foundation of the Common Understanding to increase SME participation in trade, encouraging growth and creating opportunities for small businesses across Europe.
We examine four areas which FSB believes present opportunities for positive and impactful change for UK SMEs – customs, mobility, VAT and regulation – and make recommendations for each. The recommendations can be broadly categorised as:
• Seeking adjustments to the UK-EU legal framework
• Pursuing full implementation of the TCA
• Improving guidance, information and other support for SMEs
• UK policy change
Our data shows that 45 per cent of EU traders plan to continue trading at the same level and a further 34 per cent expect to reduce or stop EU trade if the current arrangements remain unchanged. Just 6 per cent would expect to increase trade with EU countries. Taken together, this means there is both real opportunity and urgency for UK Government to address frictions in UK-EU trade. By acting on the recommendations set out in this report UK Government can deliver positive change that will allow SMEs to flourish and meet demand form their European partners.
FSB believes we have the potential to grow the proportion of SME traders intending to maintain or grow their EU activity by 25 percentage points. This calculation is based on the data in Figure 1, taking the cohorts that currently expect to maintain, grow, reduce or stop EU trade activity. We have also factored in an approximate attrition rate based on LSE research on the impact of leaving the EU on UK firms13
We stand ready to work with UK Government to unlock the potential of the UK’s small business community.
Toasting the global success of Scotch whisky
The independent whisky house, House of McCallum, has exported around the world since day one. The quality of whisky produced in the British Isles is recognised globally. Europe is the largest regional export market by volume for Scotch whisky - which by law can only be made in Scotland - with exports worth £1.5 billion.
“Scotch whisky is recognised globally. And it’s been protected, so there are specific rules...which make it a premium product. It has to be produced 100% with non-GM ingredients. It has to be matured 100% in oak barrels and you can’t put any additives or flavourings to it. So it’s that quality element as well, other countries really value that because they know that they’re buying a Scottish whisky that’s going to be of good quality.”
Customs and trade in goods
The EU is a significant market for SMEs trading goods. Almost half (46%) of survey respondents had attempted to move at least one type of good into or out of the EU over the past twelve months14
Notably and concerningly, of the businesses that attempted to move goods into or out of the EU
in the past twelve months, 85 per cent reported experiencing significant difficulties. This suggests that the challenges SMEs face are not simply the result of low resources or knowledge at firm level but that the current UK-EU trade arrangements create significant inhibitors to trade.
Figure 2: Type of goods moved into or out of the EU in the past twelve months15
Source: FSB EU trade survey 2025
Commercial samples
Products for exhibition or sale
Professional equipment to perform a service
Regulated goods
Agri-food products
Professional equipment for cultural/creative services
Other goods outside these specific categories
* Survey respondents were asked to identify whether they had exported or imported goods in specific categories chosen by FSB that tend to have more complex documentary, physical or financial requirements. The following analysis explores both the overall difficulties associated with goods trade and, where relevant, challenges associated with the individual categories listed above.
“I
have spent 60% of my time purely on navigating and producing export paperwork for last 12 months. Mainly at evenings and weekends. I cannot afford to take anyone on to do it.”
Retail, Yorkshire and the Humber
Figure 3: When you tried to move items into or out of the EU, did you experience significant difficulties with any of the following?16
Source: FSB EU trade survey 2025
Customs documentation
Customs valuation
Lack of information/ clear guidance
Physical inspections
Marking and labelling requirements
Haulage/cabotage rules
Standards or certifications
Other
ATA Carnet
None - I have experienced no significant difficulties
When respondents were asked about individual markets, customs paperwork was the most-selected challenge in each country included in the sample. This reflects previous FSB findings that document overload is a common experience for SMEs engaged in international trade: over half (56%) of SMEs that
no longer trade overseas said excessive paperwork contributed to their decision to stop17. SMEs report that customs formalities such as Export Health Certificates for agrifood products and ATA Carnets for the temporary export or import of goods are also substantial financial investments.
“We have warehouses in China and in the Czech Republic. We sell into the EU largely through our Czech warehouse now, because it’s much easier…We took that step a couple of years back to try and recover what we’ve lost in that market because, selling into small hotels, nobody wanted to do the import paperwork for a €500 order.” Manufacturing, Yorkshire and the Humber
Several respondents expressed support for closer cooperation with the EU to reduce customs paperwork, with a small number calling for Customs Union membership. While agreeing a Customs Union with the EU could reduce some customs formalities for cross-border sales such as proof of origin, other administrative requirements associated with being outside the Single Market would remain in place. The UK Government does not currently intend to pursue either agreeing a Customs Union or Single Market membership. There are however areas where it could take action to ease frictions.
A theme that emerged from qualitative data is the difficulty of complying with EU packaging rules. The Packaging and Packaging Waste Regulations require businesses to provide data on the volume and type of packaging used to the relevant authorities for each Member State in which they are active, and to pay relevant Extended Producer Responsibility fees. Each Member State has implemented the rules differently, meaning that a business – wherever it is located – that trades with multiple markets must navigate multiple processes for reporting data and paying the required duties. These requirements are difficult for SMEs to manage, particularly those engaged in lowvalue low volume trade.
“Financial costs registering annually with each country are prohibitive and the varying regulations and packaging requirements are too time consuming for my business.”
Services business, North West
Spotlight on individual markets
ICELAND
Geography is an important factor in market choice for SMEs. The markets in which higher numbers of SMEs are active (particularly in relation to export), across business size and type, tend to be those geographically closest to the United Kingdom. Quantitative and qualitative data indicate that different markets pose different challenges.
Survey respondents were asked to identify the significant barriers they have experienced in up to five markets they engage in. The figures below relate to the markets with the greatest number of respondents: Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland (as shown in the map above).
Significant barriers
• At least half the businesses trading with almost every market reported significant difficulties relating to customs paperwork: Ireland (70%), Portugal (69%), Italy (61%), Germany, the Netherlands and Switzerland (60%), France and Norway (58%), Spain (56%), Denmark (55%), Belgium (54%), Poland (53%) and Sweden (49%).
• VAT is challenging across all markets. Around four in ten of those trading with Belgium (41%), Ireland (38%) and Denmark (38%) and around a third of respondents active in the other markets, sampled report significant barriers.
• In general, physical inspections of consignments present difficulties for SMEs engaged in trade with France (20%), Ireland (23%) and the Netherlands (24%). These markets represent important entry points to the Single Market – Europe’s busiest port is in the Netherlands and Calais is a key entry point for goods entering the EU from the UK.
• Around a quarter of businesses trading with Denmark (25%), Ireland (25%), Spain (27%) and Switzerland (24%) identified challenges relating to standards, certifications or authorisations for goods
• The most-selected markets in which local regulations present significant barriers for SMEs are Denmark (22%), Ireland (25%), Norway (26%) and Switzerland (24%).
• Lack of clear guidance is a consistent challenge across all markets, but particularly for SMEs that trade with Belgium (31%), France (31%), Ireland (35%), Portugal (30%) and Switzerland (31%).
• When asked about significant difficulties or barriers to trade, importers/exporters to Switzerland chose on average 5.46 challenges from the options presented. Businesses trading with Ireland selected 4.8 and those with Norway 4.74, compared to only 3.66 for Poland. This suggests that these markets present the most difficulties overall.
Trade with Ireland
More businesses trading with Ireland experienced significant difficulties in relation to customs paperwork than in other Member States (70% of SMEs trading with Ireland). Notably, a higher proportion of businesses trading with Ireland selected each challenge than traders with almost every other country included in the sample – with the exception of short-term mobility (likely due to the Common Travel Area between the UK and Ireland). Almost half of traders (46%) with Ireland report challenges relating to EU regulations and a quarter (25%) with local regulations. Several SMEs have reported experiencing long delays and rejections of goods from Irish customs hubs, impacting their customer relationships and affecting their ability to sell into Ireland.
Digital trade
In recent years UK Government has pursued the creation of a Single Trade Window, a ‘once and done’ single electronic entry point for all export, import and transit data traders are required to provide. This would streamline trade by reducing the number of times a business would need to submit trade-related data – including customs data – to UK Government departments and allowing multiple agencies access to the same information.
Research from the International Chamber of Commerce found that the benefits of digitising trade transactions could cut transaction costs by 80 per cent, increase SME efficiency by 35 per cent and generate £25 billion in SME trade growth18. FSB supported the STW project, calling for SMEs to be placed at the heart of design and delivery. Although the 2025 Trade Strategy committed UK Government to delivering a Single Trade Window there have been few public developments since the current project was paused in 202419
The UK and EU have both committed to “endeavour to establish a single window” for documentation and data relating to the transit of goods (TCA Article 118). It is disappointing that the advantages of digital trade have not yet been fully realised but FSB welcomes UK Government’s continued efforts to support improvements to digital trade infrastructure elsewhere, notably via digital trade corridor pilot programmes with France and Germany20 and collaborating with the Digital Trade Testbed based at Teesside Airport, the International Centre for Digital Trade and Innovation (C4DTI)21 and International Chamber of Commerce. These pilots focus on digital trade documents such as invoices and bills of lading rather than customs declarations; it is therefore essential that work also continues to deliver improved digital infrastructure for the provision of customs and other import/export data.
RECOMMENDATIONS
• HMRC should deliver robust and small business-friendly digital trade infrastructure. This should include continuing to support the work of the International Chamber of Commerce and the International Centre for Digital Trade and Innovation to promote digital trade by establishing trade corridors with key trade partners.
• UK Government should also facilitate the provision of customs and other relevant data (such as health certifications) whether through reviving the single window project or seeking new solutions. Solutions must be stress-tested before roll-out – for instance, they must be able to adapt to the requirements of the forthcoming SPS agreement with the EU. Business representative organisations, including the Federation of Small Businesses should be invited to form a working group to provide feedback on and test the systems under development so that the benefits of digital trade are not confined to the largest businesses.
• The UK must maintain open communication with the EU and all other major trade partners on the development of digital trade infrastructure. The best UK infrastructure will not deliver cost and efficiency benefits if it is not interoperable with the systems in place in other jurisdictions.
Commercial samples
Sending commercial samples to potential clients is the most common reason for moving goods into or out of the EU (43 per cent of those moving materials into or out of the EU, Figure 2). This is a critical part of securing overseas business but getting the customs documentation and valuation correct can be difficult: of those moving commercial samples across borders three quarters (75%) experienced significant difficulties with documentation and just over half (51%) with customs valuation. One third (29%) experienced significant difficulties in relation to physical inspections of their samples. FSB members, particularly in the food and drink sector, report consignments of samples being returned multiple times by Member State customs authorities, causing delays and jeopardising their ability to close new contracts with overseas customers.
Over a third (35%) of businesses importing or exporting commercial samples told us they experienced challenges finding the right information and guidance. Relevant HMRC guidance hosted on the gov.uk Trade and Investment pages22 is not easy to find. For example, a search for the term ‘sample’ returns guidance on duty and VAT for businesses importing commercial samples, but not on exporting23. A search for the term ‘commercial’ returns results on taking commercial goods out of Great Britain “in your accompanied baggage or small vehicle.”24 This excludes businesses that may wish to use other means of sending commercial samples such as postal or courier services that require them to fill out their own customs declarations. Similarly, searches on the Department for Business and Trade Business Growth Service for ‘sample’ and ‘commercial sample’ do not generate relevant results.
The information UK Government provides to businesses on exporting commercial samples must improve and be more easily accessible. A helpful first step would be a dedicated page hosted on the Business Growth Service that should at a minimum signpost to trusted sources of information on how to correctly complete customs paperwork for commercial samples, as well as to existing HMRC guidance. The Department for Business and Trade (DBT) should also work bilaterally with EU Member
Keeping allergy sufferers safe around the world
Creative Nature Founder and CEO Julianne Ponan MBE believes that allergies and intolerances shouldn’t stop you from having brilliant tasting food. From its beginnings at a kitchen table, Creative Nature products - free from the top 14 allergens - can now be found in over 16 countries worldwide and on several airlines, making it safer for people with allergies to travel.
“Winning the Iberia airlines contract presented a number of unexpected logistical challenges, particularly around the delivery of product samples required for approval. Despite multiple attempts through standard freight and courier channels, we were unable to successfully get samples into the required destination in a timely or reliable manner due to shipping constraints and handling limitations no matter how many times we filled in the paperwork. In order to overcome this, we ultimately had to take the samples as accompanied baggage on passenger flights on three separate occasions to ensure they reached the relevant stakeholders. Sending samples really shouldn’t be this difficult.”
States to encourage the development of guidance on the import requirements for commercial samples into individual markets. While this does not guarantee consistent treatment by overseas customs and border officials it would help equip SMEs with the confidence to complete paperwork correctly.
Separately and no less importantly, UK Government should propose establishing distinct UK-EU routes for the free flow of commercial samples, looking to examples in other jurisdictions. For instance Singapore has a distinct procedure for the import of trade samples25 that allows non-controlled and
non-dutiable products worth less than S$400 to be imported into Singapore free of Goods and Services Tax and without a special permit26. Alternatively the United States has distinct commodity codes that can be used to classify commercial samples: US code 9813.00.20 allows temporary Importation under Bond of goods that are “samples solely for use in taking orders for merchandise”27. These products must be imported not for sale and “without payment of duty with the intent to export or destroy the goods within a certain period of time not to exceed three years from the date of importation”28
RECOMMENDATIONS
• HMRC and the Department for Business and Trade should work together to improve the provision of information on the export of commercial samples. Specific guidance should be developed to help businesses understand the rules and administrative requirements for sending commercial samples outside the UK. This guidance should be easily searchable on both the Business Growth Service and HMRC guidance pages and should signpost to trusted sources of information provided by EU Member States.
• UK Government should propose the creation of a distinct route for the movement of commercial samples between the UK and EU. In developing distinct routes for the transit of commercial samples UK Government should look to examples in Singapore and the United States and conduct a robust assessment of their effectiveness. A pilot scheme could be trialled for one type of goods, such as low-risk food products then expanded to other goods if successful.
Agri-food products
Sanitary and Phytosanitary (SPS) goods are critical to several key sectors of the UK economy, such as horticulture (worth £38 billion to the UK economy in 202329) and food and drink manufacturing (£37 billion30). Costs associated with SPS trade have risen since the UK left the Single Market: The Horticultural Trades Association found that supply chain costs have increased by up to 25 per cent in 202431. The UK’s phased approach to introducing new border requirements has spread out the changes and associated costs over several years which has eased short-term disruption but generated longer-term uncertainty and costs. Several SMEs report that EU-based suppliers or customers no longer wish to work with them due to the increased costs and bureaucracy of dealing with a non-EU business. Importers, particularly those in the horticultural sector, have also reported consistent delays and damage to goods due to physical inspections. FSB welcomed the May 2025 commitment to agree a common SPS area to remove border checks and certification requirements for most agrifood products moving between GB and the EU. An SPS agreement will be particularly important for the smooth functioning of the UK Internal Market: FSB Northern Ireland research shows that GB-NI trade in agrifood products has been affected by issues such as ‘not for EU’ labelling requirements32. UK Government should maintain an ambitious timeline for the negotiations while paying due attention to the need for any implementation to be practical and feasible for SMEs and avoiding new undue administrative or regulatory burdens. The reduction in paperwork, while welcome, will entail further change for businesses and UK Government must also therefore consider the time that SMEs will need to change their processes. UK Government must also consider the potential impact of an SPS agreement on the processes for Rest of World imports to the UK which may be required to change depending on the final wording of the SPS agreement.
“International trade (including to NI) is becoming more of a headache and complex. Customers are already complaining.”
Food and drink, West Midlands
The UK-EU Common Understanding provides for “timely dynamic alignment of the [EU] rules applicable to and in the United Kingdom…and where necessary to ensure the European Union’s level of food, sanitary and phytosanitary safety”. Dynamic alignment is a politically sensitive topic; to obtain industry support across GB and Northern Ireland the Department for Environment, Food and Rural Affairs (Defra) must engage regularly and openly with businesses and the business organisations whose members will be required to implement the changes about the issues and trade-offs under discussion. Robust governance and formal commitments around timelines and opportunities for businesses to feed into future legislative changes are necessary for the avoidance of future supply chain disruption.
RECOMMENDATIONS
• The Department for Environment, Food and Rural Affairs (Defra) should continue negotiations at pace for an SPS agreement to reduce the document and physical checks required for SPS goods moving between the UK and the EU. The SPS agreement should be delivered to achieve the Government’s ambition that businesses will begin to benefit from the agreement by mid-2027.
• As negotiations continue, and as the UK moves towards dynamic alignment of relevant legislation, Defra should commit to regular, open communication with the business community. This should include establishing a small working group of trusted stakeholders to allow for constructive discussions and feedback on how the SPS agreement will work in practice. This must include representatives of Northern Ireland businesses.
• UK Government must also consider the needs of SMEs when implementing any SPS agreement. Small businesses will need clear timelines, a phased approach and detailed guidance that will help them prepare for further changes. Business organisations such as FSB must be engaged early to help disseminate information and guidance to their networks. Defra should also work with the Department for Business and Trade to amplify guidance across departmental resources and networks such as the Business Growth Service.
Originating content and ‘Made in Europe’
Although the TCA allows many goods to be zero-rated for customs duties, businesses must demonstrate that their goods qualify for such preferential treatment by proving their origin or ‘economic nationality’ i.e. that they contain enough components sourced from either the UK or EU to be considered as ‘originating’ in the UK or EU.
The knowledge and use of preferential market access terms has likely increased as a consequence of the volume of businesses that automatically became non-EU importers and exporters in January 2021. However the information gaps illustrated above indicate further support is needed to help SMEs use the TCA to their advantage.
Figure 4: Have you or an intermediary applied for proof of origin for goods you have imported or exported in the last twelve months, to gain preferential market access?1
Source: FSB EU trade survey 2025
Not applicable to my goods I didn’t know this was possible
I don’t know or can’t prove where my goods originate My consignments fall below the customs duty value threshold I know it is possible but don’t know how to navigate the process I don’t think it is worth the effort
FSB research carried out in 2018 found that only 19 per cent of UK small businesses exporting to nonEU markets made use of the preferential market access available to them at the time under existing trade agreements33. While not directly comparable, data gathered for this report suggests that the use of preferential terms has increased after five years of trading under the TCA.
Separately, accession to the Pan-Euro Mediterranean Convention on rules of origin (PEM) is under consideration by UK Government. Signatories to the Convention may consider components sourced from any other PEM member as originating in their own territory when calculating the economic origin of their goods. Since the EU is already a signatory, UK accession could be helpful for UK businesses that source components from other PEM members
although academic research suggests that the gains may be modest34. Should the UK pursue accession, it must be accompanied by efforts to increase the provision of information to SMEs to help them to navigate any changes. At a minimum FSB would expect to see dedicated guidance incorporated into the Business Growth Service and existing HMRC guidance on rules of origin.
The issue of originating content is likely to gain further prominence because of the EU Industrial Accelerator Act (IAA) published in March 2026 which proposes ‘European’ content requirements in some industrial policy areas. While the UK and some other major trade partners are included by default in the IAA’s definition of ‘European’ content, stricter EU27 content rules apply in some areas including the automotive sector. As the EU institutions negotiate the Act UK Government must advocate for the continued inclusion of UK content in the definition of ‘European’ content. This is vital not only to prevent significant supply chain disruption for critical UK sectors but to secure the growth ambitions set out in the Industrial Strategy.
RECOMMENDATIONS
• UK Government must take SME needs into account when considering accession to the Pan-European Mediterranean convention on rules of origin. If the UK decides to pursue membership, accession must be accompanied by dedicated efforts to provide information and guidance to SMEs on how to take advantage of the benefits. This should include dedicated guidance hosted by the Business Growth Service and integrated into existing HMRC guidance on rules of origin.
• UK Government should treat maintaining the inclusion of UK components in EU criteria for ‘European’ content as a priority. Although the UK’s inclusion by default in the Industrial Accelerator Act’s definition of ‘European’ content is positive, the proposed carve-outs present serious risks to critical sectors such as automotive. As negotiations on the Act begin in the European Parliament and Council, there is a risk that the proposed definition of European content could be further narrowed by EU legislators. UK Government should treat this file as a priority and should engage proactively with EU counterparts at ministerial and official level as well as with UK business organisations to maintain a broad interpretation of ‘European’ content.
Customs treatment of low-value imports
SMEs often trade low-value consignments: 16 per cent of businesses say that the goods they import or export on average fall below the current customs duty threshold of £13535. Customs exemptions for low-value consignments (known as ‘de minimis thresholds’) are beneficial for small businesses seeking to get started in new markets by allowing them to send small packages without having to take on the additional costs of duties or engage in full customs declarations. FSB has previously argued in favour of higher customs de minimis thresholds worldwide to stimulate SME trade and contribute to economic resilience and growth.
The EU and UK are both removing favourable customs treatment for low-value imports in response to growing concerns around the volume of small e-commerce consignments shipped directly to consumers via platforms based outside Europe. The volume of low-value imports has tripled between 2021 and 202436 leading to concerns that some businesses choose to ship directly to consumers to avoid paying duty, that low quality or unsafe goods are entering the UK market without sufficient oversight and that consequently SMEs are suffering from an unequal playing field. These are legitimate concerns and it is right to address environmental and safety issues related to low-value e-commerce imports. Without easements to mitigate the impact on SMEs however the removal of low-value import thresholds in the UK and EU will have a chilling effect on SME trade activity.
Leading the way on sustainable packaging
Wales is home to The Pure Option, which offers Europe’s largest range of plant-based compostable packaging to customers worldwide. With its ‘no dead dinos’ guarantee, every one of The Pure Option’s over 400 products is designed to break down into nutrient-rich compost within 13 weeks.
“Europe is a growing market for us and overseas demand for our products is increasing. All our major competitors have left the UK, but we want to stay here – our mission is not just to replace single use plastics but to support our local community. Unfortunately most of our international shipments will encounter some kind of issue going through customs in the destination country, even though the paperwork is all there. We now tell overseas customers when they get to checkout that they should expect delivery delays – that sometimes means they don’t complete the transaction.”
“Something that would really make a big difference for my industry is a de minimis, maybe £1,000 or 1,000€. Before e 29 August, that was a major boon for me in the US. To be able to supply small deliveries within the EU without this complication [would help]. In the UK it’s £135 and I don’t have any orders less than that.”
Retail, Scotland
Although new EU rules will allow businesses to benefit from preferential or simplified tariff rates if they can prove their goods ‘originate’ in the UK or EU, in practice SMEs often choose not to apply for preferential treatment because the burden of proving origin is too onerous (see Figure 4). It is a reasonable assumption that many SMEs will respond by raising their prices or absorbing the cost, making them less competitive or damaging their own margins. Further, the application of a flat ‘handling fee’ on e-commerce items delivered directly to consumers in the Single Market will ipso facto be discriminatory against SMEs: the costs to SMEs will be disproportionate in comparison to larger firms that are both more likely to export higher value consignments and better able to absorb cost increases. As individual EU Member States introduce their own handling fee in anticipation of the EU levy, UK SMEs are required to navigate a patchwork of national rules.
The UK proposals under consideration may also have a chilling effect on the trade ambitions of SMEs based in our largest and closest trading partner. Those who wish to supply UK customers will face further paperwork and financial burdens and may consequently prefer to focus on trade within the Single Market.
RECOMMENDATION:
• UK Government should propose a common ‘de minimis zone’ between the UK and EU. The UK and EU should recognise each other as trusted partners and reduce or eliminate customs duties on low-value consignments. This would minimise the threat of poor-quality products entering the market while providing a critical stimulus for SME trade.
The Department for Business and Trade should work with FSB, Royal Mail, fast parcel operators and other business representative groups to raise awareness of forthcoming changes to the EU’s customs treatment of lowvalue imports and Member State handling fees.
• The Department for Business and Trade should help SMEs prepare for changes to the customs treatment of low-value imports. DBT should create a regulatory explainer on the Business Growth Service that maintains an up-to-date overview of the EU’s new tariff system for low value imports as well as Member State handling fees. Market-specific resources on the Business Growth Service should include this information or signpost to trusted sources of guidance such as Member State government pages.
Mobility
Overseas travel is vital for many SMEs engaged in EU trade, from securing new business to providing in-person repair services: almost half (43%) of SMEs engaged in EU trade have travelled to the EU on a short-term basis for business purposes in the past year.
While short-term mobility is important to all businesses engaged in EU trade, services businesses are more likely to travel: 49 per cent of servicesonly businesses report travelling to the EU in the past twelve months compared to 39 per cent of goods-only businesses. Short-term mobility is critical to services businesses being able to serve overseas clients; the Industrial Strategy commitment
to facilitate outbound business mobility for the professional and business services and the UKEU commitment to set up dialogues on shortterm business mobility are therefore welcome developments.
While over half (57%) of the SMEs that travelled to the EU in the past twelve months did not experience significant difficulties, several themes emerged among those who did. Travel to attend meetings or trade fairs, carry out market research or negotiate sales is least likely to present significant difficulties, likely because these activities generally fall within the visa-free activities permitted by Annex 21 of the TCA.
Source: FSB EU trade survey 2025
Attend
Figure 5: Reasons for short-term business travel to the EU in the past twelve months37
Figure 6: When travelling to the EU for business purposes, did you experience significant barriers?38
Source: FSB EU trade survey 2025
Paperwork for professional equipment or goods
Lack of information/ clear guidance
Limits on length of stay
Local presence requirements
Work permit or visa requirements
Requirement to hold EU residency/citizenship
Restrictions on being paid in the market
Licensing laws in the market
Economic needs tests
Other
None - I have experienced no significant barriers
Two topics were raised most frequently among those who responded ‘other’: roaming charges and travel delays. Several respondents reported paying high roaming charges for mobile phone use outside the UK. Although the TCA includes a commitment to “cooperate on promoting transparent and reasonable rates” for international roaming (Article 181 TCA), UK Government did not retain the EU Roaming Regulation; roaming charges imposed on UK customers are therefore the result of commercial decisions by UK mobile operators. Ofcom introduced new rules in 2024 requiring operators to notify customers when they start roaming and provide information on spend caps39 .
Several SMEs reported negative experiences with delays and queues for EU travel. The Common Understanding agreed in May 2025 confirmed that there will be no legal barriers to e-gate use for British nationals travelling to and from EU Member States following the introduction of the EU Entry/ Exit System40. Some Member States have already introduced or agreed to phase in the use of e-gates for UK nationals at some airports, including Czechia, Estonia, Germany and Portugal41. UK Government should continue to engage with Member States bilaterally to deliver a smooth transition to the use of e-gates for UK nationals.
RECOMMENDATION
• Ofcom should review the October 2024 changes to its rules and guidance related to roaming to assess whether the changes introduced are adequate. If Ofcom finds that mobile operators’ current practices are failing to protect users from high roaming charges, more robust guidelines should be implemented, as should mandatory caps on charges.
Work permits and visa rules
The TCA provisions on mobility are limited: Annex 21 of the TCA (visa-free permitted activities) excludes selling services to the public and receiving renumeration from within the country in which an individual is staying temporarily. A work permit or visa is generally required to carry out these activities. While work permit requirements present significant barriers to 8 per cent of respondents who had travelled (or their staff had travelled) to the EU in the last 12 months, barriers to mobility are most experienced by, and impactful for, services SMEs. Work permit or visa requirements were the most common reason given by the 7 per cent of SMEs (Figure 5) that said they encountered too many barriers to travel to the EU.
Each Member State may list national exceptions to the permitted visa-free activities. These can include local presence and nationality requirements, professional qualifications, language skills and work permit rules. For each trip therefore, even within the parameters of Annex 21 activities, an SME must check the rules of the Member State in question to determine whether they are able to undertake their planned activity and whether a visa or work permit is required.
Although Article 145 of the TCA commits both Parties to make information available relating to entry and temporary stay, the second most-selected challenge related to short term travel is the lack of clear guidance or information (12% of short-term business travellers). FSB supports the call from the UK Domestic Advisory Group (DAG) for full implementation of Article 145, including greater efforts from both Parties to publish more detailed information relating to short-term travel including categories of visas, the documentation required, conditions for renewal and an indicative timeframe for applications (see the DAG priorities paper for 2024-202542).
“If you’re a company here in the UK that provides services, if you try to do some work in an EU country there’s loads and loads of red tape... Especially if you’re doing a small amount of work, then it just becomes prohibitive. It’s OK if you’ve got a massive contract that’s going to last some time, but if you’ve got a very small services contract, in a lot of cases it wouldn’t be worth it.”
Legal services, Scotland
Although the permitted activities set out in Annex 21 may allow many employed workers to carry out activities visa free, SMEs have no employees43 and many are self-employed individuals or ownerdirectors. They may therefore fall under the more restrictive provisions that apply to Contractual Service Suppliers or Independent Professionals. Contractual Service Suppliers must have at least three years’ relevant professional experience, a university degree or equivalent qualification and any relevant professional qualifications legally required by the Member State in question (TCA Article 140(5) (b)). Independent Professionals are required, in addition to the same qualification requirements, to have at least six years’ professional experience (TCA Article 140(5)(c)). Several respondents expressed support for greater flexibility around permitted visafree activities and length of stay. Greater flexibility would also be welcomed by SMEs across Europe, which similarly struggle with the UK’s provisions around permitted engagements44
The complex patchwork of rules around shortterm travel affects businesses across all sectors, but particularly those supplying services. The Industrial Strategy (2025) identified Professional and Business Services as a priority high-growth sector that contributed £300 billion to the UK economy in 202445. To achieve further growth in the Professional Business Services sector, UK Government must act swiftly to reduce the barriers to mobility that are holding back UK SMEs eager to sell to our largest and closest trade market.
RECOMMENDATIONS
The UK and EU should commit to full implementation of Article 145 of the TCA by improving the provision of information available relating to short term travel. The Department for Business and Trade should work bilaterally with EU Member States to improve the guidance available to UK businesses seeking to understand local visa and work permit requirements.
• The UK and EU should expand the range of visa-free activities permitted for shortterm travel. The TCA (Article 126) allows both Parties to review the legal framework relating to trade in services and the permitted activities set out in Annex 21 as part of the scheduled TCA review taking place in 2026. UK Government should seek to negotiate a broader range of permitted visa-free activities for short-term travel including allowing remunerated work and facilitating Contractual Service Supplier and Independent Professional service provision. This should include making the Contractual Service Supplier and Independent Professional routes visa-free and reducing professional experience and qualification requirements. UK Government should also commit to addressing EU concerns around the UK’s rules around permitted paid engagements, including by creating a category for service suppliers that does not require sponsorship or English language qualifications.
• UK Government should pursue the mutual recognition of professional qualifications. Although the Common Understanding committed the UK and European Commission to set up dedicated dialogues on the recognition of professional qualifications, little public progress has been made. UK Government should continue to seek improvements to the current provisions on the recognition of professional qualifications, building on the UK’s Agreement on the Recognition of Professional Qualifications with Switzerland.
Professional business services: the UK’s superpower
The UK’s services exports are going from strength to strength, contributing £300 billion to the UK economy in 2024. FSB member Empower Translate is an awardwinning translation agency specialising in international market research, working with global brands to understand their markets.
“As a UK company, having the privilege of working with research agencies who are carrying out...really cutting-edge research puts the UK on the global map. The UK is actually the second largest global market research environment, because brands trust us....[W]hen you’re looking for something really solid and secure to spend a lot of money on and create future actions from, for big brands, that’s very comforting in a world that is so uncertain and volatile.”
Accompanying goods
Many SMEs move goods in or out of the EU for the performance of a service or other temporary purposes. Of those that move goods into or out of the EU, one fifth (21%) moved products for exhibition or sale, 8 per cent for the provision of a cultural or creative service and 19 per cent for the provision of another service (Figure 2).
One in five (19%) of those that travelled for short-term business purposes have experienced significant difficulties relating to paperwork for goods necessary to the performance of a service (Figure 6). SMEs report frustration and confusion around the paperwork and duties required for temporary export and import, particularly related to taking products overseas for exhibition or sale at a trade show –almost three quarters (73%) of businesses that take products for sale or show overseas reported difficulties related to customs documentation. Although facilitations to avoid the payment of duties on some temporary exports exist, such as temporary processing, FSB findings suggest there is a notable knowledge gap among SMEs (see also Customs Clearance): one business for instance described paying duty to temporarily export goods for a trade fair and paying further duties upon re-importing.
“Our business isn’t big enough to have a presence in Europe, except in Ireland. We would need to travel and take tools to work in other EU states, which is now virtually impossible. So we have lost all that business to EU competitors.”
Retail, West Midlands
We encourage UK Government to address this knowledge gap by improving the provision of information to businesses via the Department for Business and Trade’s Business Growth Service. If it is not possible to produce dedicated guidance on accompanying goods, the BGS should signpost to existing guidance hosted by other departments on the temporary export or import of items. For instance, a search on the Business Growth Service for ‘tradeshow’, ‘trade fair’ or even ‘temporary export’ currently returns no results relating to taking goods overseas temporarily, although detailed HMRC guidance is hosted elsewhere on gov.uk46 .
RECOMMENDATION
• Improve guidance to stop SMEs overpaying duties for temporary import and export. The Department for Business and Trade and HM Revenue and Customs should work together and with business representative groups such as FSB to identify gaps in existing guidance around temporary export and import of goods. The Department for Business and Trade and HMRC should also improve signposting to existing guidance hosted by other departments.
Cultural and creative industries
The UK’s creative industries sector is world-leading, contributing £124billion of Gross Value Added to the UK economy in 2023 with exports totalling £54.7 billion in 202147. UK Government identified the creative industries as a high-growth priority sector in the 2025 Industrial Strategy, yet the cultural and creative sectors are underserved by a lack of sector-specific provisions within the TCA. Mobility restrictions are particularly difficult for self-employed individuals and SMEs in the cultural and creative industries: visa requirements, limits on length of stay and customs paperwork for equipment have made the costs of working in the EU prohibitive for many: one respondent reported that the costs and administration have meant that touring in Europe is no longer worthwhile.
“The limited info or availability of temporary work visas make the EU difficult for the events sector. Cost of Carnets makes our services more expensive than our competitors in the EU.”
Events sector, South East
One frequently cited barrier for the creative industries is the ATA Carnet, a ‘passport for goods’ that enables the temporary cross-border movement of goods without payment of duties. It is often used by businesses taking products overseas for exhibition at a tradeshow or for the performance of a service. One in ten (10%) businesses that have moved goods into or out of the EU in the past twelve months report challenges related to ATA Carnets. They can be prohibitively expensive for businesses that may not be certain of getting enough overseas work in the ensuing year to cover the upfront expense – at current rates an SME in need of an ATA Carnet at short notice may need to pay close to £1,00048 to secure the documentation. The vast majority (93%) of UK creative industries firms are micro-businesses49 and amounts that are more easily absorbed by large companies can be businesscritical for SMEs. While ATA Carnets are international customs documents, not specific to UK-EU trade, there are easements elsewhere that UK Government should consider to ease the pain for the creative industries. In particular FSB supports the call from the Domestic Advisory Group for UK Government to seek visa waivers and exemptions to cabotage rules for touring artists and other creatives.
RECOMMENDATION
• UK Government should seek changes to facilitate creative and cultural exchanges in line with the commitments set out in the Common Understanding. This should include easements to mobility provisions in the TCA for the creative and cultural sector such as visa waivers or an extension to the 90-day limit on length of stay for particular occupations (such as touring artists) and exemptions to current cabotage rules, as set out in the UK Domestic Advisory Group priorities paper.50
Trade shows
Attending trade shows regularly is a vital part of securing new business for many SMEs, facilitating networking with prospective clients and raising brand awareness. The costs of doing so can however be prohibitive; in addition to paying the costs of travel, accommodation, shipping, stand hire and entry fees, the cost of taking time away from the business at home is also an important consideration. Since the 2021 closure of the Tradeshow Access Programme numerous FSB members have raised concerns about the lack of UK Government financial support for tradeshow attendance. Rising costs of participating in UK Government-sponsored delegations combined with declining financial support are contributing to falling tradeshow attendance among SMEs: one business reported cutting a major tradeshow from their itinerary as a result of a significant increase in the financial contribution required to secure a place on a Department for Business and Trade stand.
A more comprehensive and small-business friendly approach to trade show support is needed, including better financial support as well as more effective communication to businesses about tradeshow delegations and opportunities. The UK Government’s Small Business Plan (2025) committed to considering how to “best support exporting businesses to increase their exporting activity, including future financial support”51. The Department for Business and Trade should work with the Federation of Small Businesses and partners to design financial support that works for SMEs.
RECOMMENDATION
• HM Treasury should develop a new funding programme for SMEs to support their participation in international trade. A new dedicated funding stream should be established that allows microbusinesses to apply for subsidies of up to £2,000 per year for three years. The subsidy should permit recipients to meet or offset the upfront cost – often a deterrent to cash-poor SMEs – of specific activities that support the development of overseas business such as trade show attendance or commissioning market research. The Department for Business and Trade could consider successful examples elsewhere such as the Australian Export Development Grant52. Research by FSB53 and others including McKinsey54 and the Enterprise Research Centre55 demonstrates the impact of government support on growth and job creation while research commissioned by UK Government shows that export-specific support can be linked to increased turnover, productivity, employment and firm survival.56
One thing that’s happened with my business in the last five to six years is I’ve stopped doing trade shows overseas. I used to go to Frankfurt, to Munich. I used to go to Switzerland, France, Sweden, Denmark. I think trade shows aren’t what they used to be in my industry…so I’ve really pulled back and just gone almost 100% onlinepromoted now. But I do feel out of sight, out of mind to a certain extent. And I think one of the reasons I haven’t chosen to go back to a European trade fair is just the sheer cost and I don’t think the grants are available as generously as they once were. So at a time where I’m probably more hesitant to go to international trade show, there seems to be less opportunity.
When you actually look at all the costs of going away, organising, getting your samples and your stand delivered and the accommodation…the base stand price might be £4000 and then it will be possibly another £4000 on top.
Clothing, Scotland
The keys to success in the classic vehicle sector
The historic vehicle sector contributes over £7 billion to the UK economy and supports the preservation of specialist skills, from restoration to maintenance. European customers often trust UK-based businesses such as Retro Marques Ltd to work on their vehicles with the same passion and care as they do.
“There’s quite a bit of trade in and out of Europe in the classic car world... because the UK is seen as a centre of excellence for historical vehicle work... whether it’s auctions, buying and selling, [or] specialist repairers like us. [Heritage vehicles] are now £7 billion per annum as income to the British economy, and a lot of that will be coming across the Channel because we’ve still got the specialist skills here, almost artisanal.”
VAT
VAT is consistently identified as a challenge for SMEs engaged in international trade. Three quarters (75%) of businesses that have engaged in the activities listed in Figure 7 reported experiencing significant difficulties and when asked about individual Member States, VAT is one of the top three named challenges for each country included in the sample (see Spotlight on individual markets section above).
Overall, four in ten (41%) businesses that had engaged in the listed VAT-related activities (Figure 7) said that not being able to find clear guidance presented a significant difficulty. This is a problem experienced consistently across business size, whether the business supplies goods or services, and sector.
Figure 7: In the past twelve months, have you done any of the following in relation to VAT?2
Source: FSB EU trade survey 2025
Used an e-commerce platform or other service to facilitate collection and payment of VAT in the EU Engaged a fiscal representative for VAT in one or more EU Member States Used postponed VAT Accounting for imported goods
Used the EU Import One Stop Shop
Been registered for VAT in more than one EU Member State I don’t know Been registered for VAT in a single EU Member State
Attempted one or more but encountered too many barriers
I have not attempted any of these activities
“It is not ‘significant’ but inconsistent. Paperwork [is] handled the same way each time but not necessarily treated the same. Sometimes VAT is handled properly, sometimes not. Sometimes certificates are requested, sometimes not. Repairs procedures are the worst affected.”
Life sciences, Scotland
EU fiscal representatives
A minority of SMEs have registered for VAT and/ or appointed a fiscal representative in one or more EU Member States. Respondents across all business sizes and sectors report significant difficulties related to doing so, particularly the costs (36%) and time (21%) required to appoint a fiscal representative, and the administrative burdens of EU VAT registration (36%). SMEs report that the upfront cost of registering for VAT and/or appointing a fiscal representative is a deterrent, especially traders of low-value or low-volume consignments who do not believe they will see sufficient return on their investment.
Postponed VAT accounting can be used by UK VAT-registered businesses to account for import VAT on goods on a VAT return rather than paying it at the time of import. This can improve cashflow and streamline processes, but only a quarter of SMEs active in EU trade report using Postponed VAT accounting in the past twelve months. This may partly be because SMEs that are not VAT-registered are not eligible to use it, but eligible SMEs report that the administrative burdens involved are a deterrent.
“I’m a small brand. My bread and butter is small, independent retailers and a lot of them just don’t want the complication. They maybe don’t order more than 500-1,000€ at a time and I’ve just not found a way to make it work. I looked briefly at registering for VAT in the EU, I think the cost of that is prohibitive, as is warehousing. I’m not sure if it’s front loading [the expense] and I’m worried that I won’t get it back.
I thought DDP [Delivered Duty Paid] was going to be my solution. I put my prices up to incorporate the duty and the tax, but I think in the majority of cases, customers are coming on my website and thinking, oh, that’s expensive and I’m not sure if that actually has been the right way. Maybe I should just stick with my base price and just be very clear about what the additional prices are on top of it instead.”
Clothing, Scotland
Businesses in GB that send low-value consignments (below 150EUR) to customers in the EU or Northern Ireland may choose to register for the EU’s Import One-Stop Shop (IOSS) scheme, a mechanism that allows a non-EU business to register in a single EU Member State rather than in each Member State in which they do business. Although IOSS has the potential to be helpful for small businesses, just
6 per cent of traders have registered in the past twelve months. Among those that have experienced significant difficulties associated with VAT, one in five (22%) said these related to the administrative burden of using IOSS. To use IOSS, businesses are required to appoint a fiscal representative. Although EU legislation allows for an exemption to this requirement for some third countries, to date Norway is the only third country considered to have concluded a similar agreement on mutual assistance57 58 59
As the European Commission takes steps to increase the use of IOSS through requirements on sellers to pay VAT at the point of sale, as well as a proposal to remove the 150EUR limit, the obligation to appoint a fiscal representative remains a significant barrier to UK SMEs. An increase in – or removal of – the upper value limit for use of IOSS would theoretically allow more SMEs to benefit from streamlined methods of paying VAT, but the requirement to appoint a fiscal representative would still make IOSS inaccessible to smaller firms. We have welcomed the efforts of HM Revenue and Customs to address the question of fiscal representatives with the EU, and encourage UK Government to continue discussions.
RECOMMENDATIONS
• HMRC should negotiate measures to help UK SMEs use IOSS. Changes allowing some intermediaries to complete and submit a monthly IOSS VAT return on behalf of a client from 1 April 2026 may reduce administrative burdens for UK SMEs, but will also increase costs, such as fees. UK Government should therefore continue to call for the EU to scrap the requirement for UK businesses to appoint fiscal representatives to benefit from IOSS.
• The Department for Business and Trade should improve signposting to guidance for SMEs. Existing resources on the Business Growth Service should incorporate additional signposting that directs businesses to trusted Member State sources of guidance, such as the Netherlands government Information for entrepreneurs found at business.gov.nl60. The Department for Business and Trade should also engage bilaterally with key trade partners to improve or develop English-language guidance for non-EU businesses.
Regulation
GB-based traders must demonstrate compliance with EU rules to sell into the EU or Northern Ireland. This generates administrative and financial costs for SMEs as well as uncertainty, although in many cases the UK’s rules derive from EU legislation and establish similar standards. The current approach to regulatory divergence is fragmented, with no single
Source: FSB EU trade survey 2025
caused by the implementation of new UK regulations and ‘passive’ divergence, where the EU updates or creates new legislation which the UK Government does not implement and apply. The administrative interpretation burden of this complex regulatory landscape falls heavily on small enterprises.
dedicated capacity to track, interpret, and respond in a way that supports proactive decision-making and economic resilience. While government departments monitor divergence to varying extents, businesses must often navigate multiple websites and documents to understand how specific rules apply to them. Under the Windsor Framework, Northern Ireland is subject to ‘active’ divergence, which is
In some areas, the difference between UK and EU regulations is growing. For example, the EU has introduced new rules around product safety and supply chain transparency (such as the General Product Safety Regulation) and banned certain chemicals from the Single Market, while the UK has relaxed some aspects of EU financial services regulations.
Figure 8: How is regulatory divergence affecting your business?3
A total of 3 per cent of total respondents reported that regulatory divergence has had a positive impact on their business. When given the opportunity to provide further context a small number explained that they provide B2B advisory services helping others navigate the regulatory environment. In this instance regulatory divergence has created a gap in the market that has generated opportunities for growth.
The largest group of respondents say there has been no impact to their business. However qualitative evidence shows this was often due to these businesses having withdrawn from selling to or buying from EU countries.
A third (34%) of respondents overall said that regulatory divergence has affected them negatively. The reasons provided can be grouped into three themes:
• The time required to understand and navigate multiple complex regulations in different territories and to manage the associated administration.
• The volume of additional paperwork such as customs declarations and labelling requirements.
• Costs incurred to manage trade complexities.
This is consistent with FSB findings, that the most significant challenges to SME participation in international trade are the time and cost involved as well as knowledge gaps61. Further, a higher proportion of goods businesses report a negative impact (42%) than services-only businesses (22%). When given the opportunity to provide further context to their views, several respondents expressed a preference for full regulatory alignment and a Customs Union relationship with the EU, while a small number expressed strongly that they would not be in favour of any further alignment.
SMEs are likely to face further uncertainty and increasingly different regulatory frameworks as the UK and EU pursue independent legislative agendas. The present UK Government has not ruled out closer regulatory alignment with the EU; indeed, the UK has committed to pursuing dynamic alignment with EU SPS regulations and to legislating to empower ministers to align with EU SPS and other relevant rules.
“Truthfully, we’ve become very reactionary. We have spent time preparing for things which were then delayed, changed and/or cancelled and turn out to be wasted time or need to be changed again. It’s very difficult to keep ahead of all the ‘small’ changes and in a micro team we just don’t have the resource. We rely heavily on our trade bodies and professional partners to keep us up to date with the most critical changesbut I’d also confess I’ve become blind to the regular emails as there tends to be a lack of clarity.”
Life sciences, Scotland
Full steam ahead: harnessing the power of the UK’s rail heritage
The UK’s rail heritage draws customers from around the world to businesses like Worcester’s InGauge Ltd where model locomotives are lovingly serviced and repaired, and customers attend workshops on topics from wiring and soldering to Digital Command Control.
“When [a parcel] gets into Europe, depending on which country, people then have to pay - even if it’s a sample they’ve had or a warranty repair, which for them is no cost, or even a replacement part - they have to pay to get their parcel. I would like the Government to try and understand what...smaller companies really have to go through with exporting now. Larger companies can swallow it, but smaller companies like ourselves, if we swallow it we will then go out of business.”
There are both benefits and risks of aligning with EU regulation. Alignment could ease trade frictions for SMEs – including internal UK internal market frictions – but the costs and potential administrative burdens as SMEs are required to adapt to new processes and standards must also be considered. The UK Government should also carefully consider the potential impact on the UK’s other key trade relationships such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the UK-US Economic Prosperity Deal. FSB would welcome greater transparency from UK Government, particularly on the potential impact on SMEs, as negotiations on regulatory alignment continue.
There is a clear link between preference for closer regulatory alignment and sector. Almost half (48%) of respondents in the manufacturing sector and one third (33%) of those in the wholesale and retail sector say their business would benefit from closer alignment in product standards, while 45 per cent of respondents in the information and communication sector express a preference for closer alignment in digital and data. It is important to note that unilateral UK alignment alone is not sufficient to reduce frictions in UK-EU trade but would need to be accompanied by EU recognition and mutual commitments to have an impact.
Source: FSB EU trade survey 2025
Figure 9: In what areas, if any, would it be most beneficial to your business for the UK and EU to pursue closer regulatory alignment?4
Spotlight on Northern Ireland
Regulatory divergence has created substantial friction in GB-NI trade as Northern Ireland remains subject to EU regulations on goods. Traders who can prove their goods are not ‘at risk’ of entering the EU via Northern Ireland may benefit from reduced paperwork and checks but FSB research shows that in practice the current arrangements are not working well for SMEs62. The 2025 FSB Northern Ireland report, Windsor Framework realities: Barriers to trade in the UK Internal Market, reveals widespread trade frictions and operational disruptions, low business confidence and gaps in government support.
The report found that:
• Over half of respondents (58%) who trade between Great Britain and Northern Ireland have experienced moderate or significant difficulties operating across the UK Internal Market. One third (34%) have halted trade with the other region.
• Over three quarters (78%) of NI-based respondents have experienced negative impacts to some extent compared to 56% of GB-based respondents.
• One in three businesses (33%) have faced significant disruption, including supply delays, stock shortfalls and lost sales.
• Over half (56%) of businesses affected by the Windsor Framework are “not confident” or “slightly confident” in shaping their business strategy for the next 12 months.
• 14% of NI-based respondents feel they understand and benefit from dual market access.
FSB NI has called for urgent, targeted action to address these findings, including:
• Improvements to the Trader Support Service
• A centralised hub for Windsor Frameworkrelated queries
• Supplementary agreements with the EU to reduce compliance burdens
Concerns raised by FSB members during the research for the current report reflected these findings. The most frequently raised themes were the movement of parcels between Great Britain and Northern Ireland, ‘not for EU’ labelling, and the impact of regulatory divergence.
After the publication of FSB NI’s Windsor Framework Realities report, an intense period of engagement with UK Government was undertaken. The main recommendation of this report was the concept of a ‘one stop shop’, to counteract the 78 per cent of respondents who felt that UK Government guidance is poor and 80 per cent who believed the support is difficult or very difficult to access. UK Government`s announcement in the 2025 Autumn budget of £16.6million of funding for a ‘one stop shop’ support service to help businesses navigate the Windsor Framework and reduce bureaucracy is a positive and welcome step forwards.
“Being affected by the Windsor Framework for GB to NI movements we see a continued shift away from the GB supply chain as companies look to see (if possible) what alternatives there are due to the bureaucracy involved.”
Transportation and storage, Northern Ireland
“We have a ridiculous situation where we will ship some products from the Czech Republic to Ireland and Northern Ireland rather than from GB because it’s cheaper for us than shipping it from 50 miles across the Irish Sea.”
Manufacturing, Yorkshire and the Humber
Regulatory divergence and trade in goods
Four in ten (41%) goods-only businesses say that they would benefit from closer alignment in product standards. Having to comply with two sets of product standards generates significant costs and administrative burdens for SMEs, such as testing and certification. For many the uncertainty around how to comply with changing regulations is as important a factor as the costs involved.
Several respondents cited the General Product Safety Regulation as the reason they stopped exporting to the EU. The Regulation requires non-EU businesses placing a product on the Single Market
Source: FSB Small Business Index Q1 2025
I did not need to make changes and continue selling to the EU and/or NI
I made changes to comply so I can continue selling into the EU
I don't know how to comply with GPSR I have stopped sales to NI I have stopped sales to the EU I have incurred additional costs to comply with GPSR I made changes to comply so I can continue selling into NI
to appoint an EU-based Responsible Person to act as the point of contact with the relevant authorities. The cost of doing so can be prohibitive: some FSB members estimated the cost as upwards of £1,000 and one reported that the cost of appointing a Responsible Person would be more than their current trade value in the EU. Many SMEs also found compliance with the Regulation confusing and complicated. For some it was unclear where responsibility for appointing a Responsible Person lay, and the risk of non-compliance presented a significant enough risk for them to stop EU sales.
Figure 10: Impact of General Product Safety Regulations on SMEs5
It is important to note that alignment alone does not equate to equivalence – i.e. greater access to the EU Single Market. The UK Product Regulation and Metrology Act (2025) for instance allows UK Government to replicate EU regulations linked to the environmental impacts of products. This could deliver some predictability for businesses in the relevant sectors, but unilateral alignment will not reduce the need for proof of compliance with EU rules nor with any customs-related requirements for UK goods sold in the EU.
The UK has continued to recognise EU standards for some products (CE product safety marking is recognised in 21 product areas) but the EU has not reciprocated by recognising the UK’s UKCA product safety mark. This has created an asymmetry that in the short-term relieved supply chain disruption for UK businesses but in the longer term generates additional costs and administrative burdens for SMEs that may need to comply with two sets of standards. EU SMEs meanwhile do not need to take additional steps to demonstrate compliance with UK regulations. SMEs may for instance have to pay for their products to be tested for conformity with two regulatory frameworks to continue supplying both the UK and EU markets (including Northern Ireland). Several members told us that they are only able to pay for one testing procedure. Mutual recognition by the UK and EU of each other’s conformity assessment processes, if not standards, would be beneficial to maintaining a stable regulatory environment and facilitating trade in goods by reducing the administrative burdens and costs of dual testing.
RECOMMENDATION
• UK Government should pursue the mutual recognition of standards and quality marking. This would address the current asymmetry in standards recognition in which EU products can be placed on the UK market without any further testing. The UK Government should also pursue the mutual recognition of conformity assessment to allow UK bodies to be recognised as eligible to test products to EU standards.
“When I launched my business, one of the biggest expenditures to start with was getting my product tested to demonstrate that it actually did what I said it did. I used BSRIA to test it, I think it cost me about £11,000. BSRIA’s testing facilities were accepted right across Europe, so I only had to do that once and that was done, but I believe now we’re no longer part of the EU, you have to get it tested by the EU. It’s not something I’ve done but it’s just another inconvenient cost that would have had to have been undertaken because we’re not a part of the EU.”
Manufacturing, South East
Digital and data regulations
One third (35%) of services-only SMEs believe that closer alignment in digital and data regulations would benefit their business. Digital infrastructure is critical for the delivery of services: over half (57%) of services businesses supply their overseas clients remotely via email or another digital medium. It also underpins vital business operations: any business processing or handling the personal data of EU customers must comply with the General Data Protection Regulation. Maintaining ‘adequacy’ status with the EU is therefore critical to the smooth functioning of cross-border data transfers and business operations. The cost of losing adequacy status has been calculated at £3,000 for a microbusiness, £10,000 for a small business and £19,555 for a medium-sized business63. These costs are substantial, but the uncertainty created by losing adequacy status would also be significantly disruptive to businesses. The extension in late 2025 of the UK’s adequacy status until 2031 is extremely welcome as it provides greater stability for business planning.
As the UK and EU develop independent approaches to emerging technologies such as Artificial Intelligence, significant differences in regulatory frameworks are likely, in practice, to result in SMEs complying with the more stringent standards. The UK Government should maintain careful monitoring of EU digital regulation and should use existing channels of communication with business (such as the EU Files Forum, see below) to consider carefully future regulatory approaches and the potential impact on UK businesses.
RECOMMENDATION:
• UK Government should prioritise maintaining the UK’s data adequacy status. The UK remains the only country for which the EU’s adequacy decision includes a sunset clause, meaning that adequacy status will expire in December 2031 unless extended again. When developing any further changes to the UK’s data protection legal framework, the Department for Science, Innovation and Technology (DSIT) must carry out a robust assessment on the potential impact on adequacy status.
Engagement with the EU legislative agenda
Regardless of the UK Government’s approach to regulatory alignment or divergence, crossdepartmental understanding of and engagement with the EU legislative programme is critical. While the Cabinet Office has overall responsibility for the UK-EU relationship, the integration of our markets and value of our trade relationship is such that multiple departments need to actively monitor and assess the impact of EU regulatory changes. This is important firstly to support the development of the UK’s own regulatory priorities and decisions. The regulations implemented in our largest and closest regional market will continue to impact those who wish to do business with the EU. FSB consistently called for the establishment of a stakeholder working group within the Department for Business and Trade to monitor EU legislative files and welcomed the establishment of the EU Files Forum, a quarterly stakeholder group to discuss the EU legislative programme and its potential impact on UK businesses and cross-border supply chains. The UK Government’s approach to its relationship with the EU should be more strategically communicated to stakeholders. FSB supports the recommendations of the Foreign Affairs Committee that the Cabinet Office should “strengthen inter-departmental flows of information on EU negotiations with other Departments” and that UK Government should make clear any further ambitions for dynamic alignment64
Secondly, closer alignment with EU regulation will make UK Government engagement in the EU legislative process more important. There is currently no formal mechanism for the UK to provide input to the EU legislative process. Moreover, Northern Ireland is often subject to EU rules and regulations but has incredibly limited up-stream cite and influence on this. The Common Understanding sets a precedent by stating that the UK will “be involved at an early stage and contribute appropriately for a country that is not a member of the European Union to the decision-shaping process of European Union legal acts in the fields covered by the obligation to dynamically align65” in relation to legislation relevant to the SPS agreement. It has not yet been clarified what form these arrangements will take; UK
Government should seek a bespoke arrangement that allows the UK to participate in relevant European Commission committees or Council working groups in a manner similar to Norway and other EFTA countries. This should include allowing the UK to participate in the preparatory phase of legislation.
More broadly, the UK Government should take a more strategic, cross-departmental approach to engaging proactively throughout the EU legislative process, coordinated by the Cabinet Office. UK Government should look to the approach taken by Norway in this regard: the Norwegian Ministry of Foreign Affairs has published an extensive handbook for government officials, local and regional administrations and businesses which provides an overview of the EU’s decision-making process and Norway’s involvement66. Norway also engages proactively with stakeholders on EU legislation from the earliest stages. For instance, the EU proposed a new Digital Networks Act on 21 January 2026; on 10 February 2026 the Ministry of Digitalisation and Administration published a public call for stakeholder input67 .
Finally, many SMEs report struggling with a lack of clear information and guidance to help them navigate the growing differences between UK and EU legislation. In 2024 a large number of SMEs told FSB they became aware of the EU General Product Safety Regulation via social media posts, peer networks or news articles. Many reported that in the absence of either EU guidance or UK Government information they did not feel confident in the accuracy of the information they received or in their ability to comply. Several survey respondents indicated that the Regulation was the reason behind their decision to stop EU trade. FSB acknowledges that providing guidance on the regulations imposed in other jurisdictions is not within the remit of UK Government; nonetheless government webpages are a trusted source of information for many SMEs. Following engagement with industry stakeholders via the EU Files Forum, the Department for Business and Trade has created information for businesses aimed to help them to navigate priority EU legislation. This is a welcome development and we
encourage the Department to build on this approach by improving signposting via the Business Growth Service to trusted sources of Member State and EU guidance on compliance with regulations.
“I’ve been hit both sides with the whole Brexit thing. For me, selling into Europe just became unrealistic. Having to put my VAT accounts through a European country just wasn’t viable for me. I’m starting to look at maybe using a third-party company, but as a sole trader where you’re responsible for doing every aspect of your business, it’s another thing to add to the list so it keeps getting pushed further and further along.
I also import a lot of stock from the EU as well. So of course I now have to pay duty and VAT on those goods coming in… obviously that puts up my cost prices, which then increases my retail prices... And so in the global marketplace, it’s much more expensive now for, say, someone from Canada to buy from me than it is from a competitor within Europe, which puts me at a disadvantage.
The [cost and paperwork] combined just make it prohibitive. As a sole trader, I’m pulled in lots of directions as it is, it’s hard enough to get everything done. So adding those on top just doesn’t make it worthwhile, which is a real shame because I had a lot of really loyal customers in in the EU and I was really sad to lose them. Similarly, there isn’t a week that goes by when I don’t get emails from people within the EU frustrated because they can’t check out and so it’s really difficult and disappointing.”
Textiles, South East
RECOMMENDATIONS
• UK Government should negotiate a bespoke mechanism for engaging with the EU on policy relevant to the forthcoming SPS Agreement. This should allow the UK to participate in relevant European Commission committees or informal council working groups. UK Government and the EU should look to existing models, where third countries such as Norway participate in EU policymaking.
• The Cabinet Office should coordinate proactive cross-departmental engagement with the EU legislative process. Technical and political engagement should begin at the earliest stages of the legislative process to identify files that will impact UK businesses. Itmust include robust consultation with the business community, following the Norwegian model.
• The Department for Business and Trade should improve accessibility of information on EU regulations. This should include improving signposting to Member State information on how to comply with the implementation of EU laws, such as packaging rules.
Methodology
This report is based on FSB members’ experiences of trade with the European Union under the terms of the UK-EU Trade and Cooperation Agreement.
FSB undertook a mixed method approach for the research consisting of quantitative online survey as well as semi-structured interviews and focus group discussion with SMEs across the UK.
The survey was nationwide in reach and members were invited to participate in the survey via email and social media channels. The survey was administered by the research agency Verve and was in the field from 14 to 28 October 2025. The survey questionnaire was completed by a total of 645 small businesses.
The survey findings are weighted according to FSB membership, reflecting the demographic balance of FSB members throughout the UK. All percentages derived from the survey are rounded to the nearest whole number, which is why some percentages presented in the figures do not add to 100 per cent.
The interviews and focus group were conducted online and over the phone and purposefully drew from a variety of regions and sectors. These were carried out in January and February 2026.
Endnotes
1 Response rates for ‘other’ or ‘don’t know have been omitted from the chart for simplicity. Respondents were able to select multiple reasons for not applying for preferential tariff treatment
2 Respondents were able to select multiple options
3 Response rates for ‘don’t know’ have been omitted from the chart for simplicity
4 Respondents were able to select multiple options
5 Table excludes respondents who said they not affected by GPSR. Respondents could select multiple answers.
6 House of Commons Library, Statistics on UKEU trade (22.4.2025) https://commonslibrary. parliament.uk/research-briefings/cbp-7851/
7 UK Government, The UK’s Modern Industrial Strategy (2025): https:// assets.publishing.service.gov.uk/ media/69256e16367485ea116a56de/ industrial_strategy_policy_paper.pdf
8 Mario Draghi, The future of European competitiveness (September 2024): https://commission.europa.eu/document/ download/97e481fd-2dc3-412d-be4cf152a8232961_en?filename=The%20 future%20of%20European%20 competitiveness%20_%20A%20 competitiveness%20strategy%20for%20 Europe.pdf
9 Welsh Government, Welsh international goods trade: 2024, https://www.gov.wales/ welsh-international-goods-trade-2024html#:~:text=The%20proportion%20of%20 Welsh%20export,Source:%20RTS%2C%20 HMRC
10 Department for the Economy, Northern Ireland Economic Trade Statistics 2024, https://www.economy-ni.gov.uk/news/ northern-ireland-economic-trade-statistics2024-northern-ireland-annual-businessinquiry-2024
11 Scottish Parliament, Exports Statistics Scotland 2023 (25.11.2025): https://www. gov.scot/publications/exports-statisticsscotland-2023/
12 Response rates for “don’t know”, “other, please specify” and “I don’t trade with the EU” have been omitted from the chart for simplicity. Respondents were able to choose multiple responses.
13 Centre for Economic Performance, Deep integration and trade: UK firms in the wake of Brexit (2025): https://cep.lse.ac.uk/pubs/ download/dp2066.pdf
14 NB although our survey asked respondents about their experiences trading with both EU and EFTA countries, in order to be concise we refer throughout this report to ‘EU’ countries.
15 Not including businesses that did not move goodst
16 Respondents were able to select multiple options
17 FSB, Customs Clearance: The road to seamless trade for small businesses (2023): https://issuu. com/federationofsmallbusinesses/ docs/fsb-customsclearance?fr=sYWNhNDYzMDc2MDE
18 International Chamber of Commerce (ICC) United Kingdom, Seizing the moment: Unleashing the potential of trade digitalisation (2023): https://iccwbo.uk/ wp-content/uploads/2024/04/Seizing_the_ moment_Unleashing_the_power_of_trade_ digitalisation_report.pdf
19 UK Parliament, Single Trade Window: Statement by Exchequer Secretary to the Treasury (5.11.2024): https://questionsstatements.parliament.uk/writtenstatements/detail/2024-11-05/hcws188
20 Department for Business and Trade, UK showcases digital trade leadership at global business meeting (22.10.2026): https://www.gov.uk/government/news/ uk-showcases-digital-trade-leadership-atglobal-business-meeting
21 Teesside University, Teesside Digital Trade Testbed: Pioneering the future of global trade from Teesside International Airport (accessed 23.2.2026): https://www.tees.ac.uk/sections/ business/partnership/dtt.cfm
22 UK Government, Trade and investment guidance and regulation (accessed 23.2.2026): https:// www.gov.uk/search/guidance-andregulation?parent=%2Fbusinessand-industry%2Ftrade-andinvestment&topic=ed2ca1f7-5463-4eda9324-b597e269e242
23 UK Government, Customs declarations, duties and tariffs (import and export) guidance and regulation (accessed 23.2.2025): https://www.gov.uk/search/ guidance-and-regulation?parent=/ business-and-industry/customsdeclarations-duties-tariffs&keywords=sa mple&topic=5984199c-d85c-4ffc-b13ac5f2482d2258&order=relevance
24 UK Government, Guidance: Taking commercial goods out of Great Britain in your baggage (accessed 23.2.2025): https:// www.gov.uk/guidance/taking-commercialgoods-out-of-great-britain-in-your-baggage
25 Singapore Government, Importing trade samples (accessed 23.2.2026): https://www. customs.gov.sg/businesses/importing-goods/ import-procedures/importing-trade-samples/
26 This includes food samples, although these require registration with the Singapore Food Agency.
27 HS code 9813.00.20 is used for “samples solely for use in taking orders for merchandise”. US Government Harmonized Tariff Schedule (accessed 25.2.2026): https://hts.usitc.gov/search?query=sample
28 US Customs and Border Protection, Temporary Importation under Bond (accessed 25.2.2026): https://www.cbp. gov/trade/programs-administration/entrysummary-and-post-release-processes/ temporary-importation-under-bond
29 Horticultural Trades Association, Autumn Budget 2025: submission from the Horticultural Trades Association (26.9.2025): https://hta.org.uk/resources/ get?mediaId=24196
30 Food and Drink Federation, Powering Communities – UK food and drink manufacturing regional report 2025 (2025): https://www.fdf.org.uk/globalassets/ resources/publications/reports/fdf-regionalreport-update-230425.pdf
31 Horticultural Trades Association, The UK’s SPS Agreement with the EU (2026): https:// hta.org.uk/resources/get?mediaId=25707
32 FSB, Windsor Framework Realities
33 FSB Customs Survey (2018).
34 Centre for Inclusive Trade Policy, Should the UK join the PEM? (17.12.2025): https://citp. ac.uk/publications/should-the-uk-join-thepem
35 FSB, Customs Clearance
36 HM Treasury and HM Revenue & Customs, Reforming the customs treatment of low value imports into the United Kingdom: consultation document (2025): https:// assets.publishing.service.gov.uk/ media/692576c7aca6213a492dcfda/ FINAL_-_Reforming_the_customs_ treatment_of_low_value_imports_into_the_ United_Kingdom.pdf
37 Respondents were able to choose multiple options.
38 Response rates for ‘don’t know’ have been omitted from the chart for simplicity. Respondents were able to choose multiple options.
39 Ofcom, New roaming alerts for UK holidaymakers (1.10.2024): https://www. ofcom.org.uk/phones-and-broadband/billsand-charges/new-roaming-alerts-for-ukholidaymakers
40 UK Parliament, EU countries - Immigration controls: question for Cabinet Office (30.5.2025): https://questions-statements. parliament.uk/written-questions/ detail/2025-05-30/55036/
41 UK Government, Boost for travelers and businesses as Germany opens up eGates (18.7.2025): https://www.gov.uk/ government/news/boost-for-travelers-andbusinesses-as-germany-opens-up-egates
42 UK Domestic Advisory Group, 2024-2025 priorities report (accessed 23.2.2026): https://assets.publishing.service.gov.uk/ media/66311078e6646073034b9bf7/UKEU-TCA-Domestic-Advisory-Group-20242025-Priorities-Report.pdf
43 FSB, UK Small Business Statistics (accessed 25.2.2026): https://www.fsb.org.uk/mediacentre/uk-small-business-statistics
44 SMEunited, EU-UK Trade and Cooperation Agreement (accessed 25.2.2026): https:// www.smeunited.eu/admin/storage/ smeunited/final-smeunited-eu-uk-tca.pdf
45 UK Government, The UK’s Modern Industrial Strategy: Professional and Business Services sector plan (accessed 23.2.2026): https://assets.publishing.service.gov.uk/ media/6892153b66bdd4490c610996/ industrial_strategy_professional_and_ business_services_sector_plan_accessible. pdf
46 HM Revenue and Customs, Taking commercial goods out of Great Britain in your baggage (15.1.2024): https://www.gov.uk/ guidance/taking-commercial-goods-out-ofgreat-britain-in-your-baggage
47 UK Government, Creative industries sector overview https://www.business.gov.uk/ invest-in-uk/investment/sectors/creativeindustries/
48 For a non-member of the London Chamber of Commerce and Industry the current issuing fee for an ATA Carnet is £444 fee (£370+VAT) plus a security fee that is calculated according to the destination market, the trip duration and the value of the goods being taken. If an ATA Carnet is needed at short notice, an additional fee (£215+VAT) is added. Figures correct as of 24.2.2026. Source: London Chamber of Commerce and Industry, Trade documentation: ATA Carnet (accessed 24.2.2026): https://www.londonchamber. co.uk/international-trade/tradedocumentation/ata-carnet/
49 Department for Culture, Media and Sport, DCMS economic estimates: Business demographics 2024 – main report (2024): https://www.gov.uk/government/statistics/ dcms-economic-estimates-businessdemographics-2024/dcms-economicestimates-business-demographics-2024main-report
50 UK Domestic Advisory Group, 2024-2025 priorities report (accessed 23.2.2026)
51 Department for Business and Trade, Backing your business: our plan for small and medium-sized businesses (2025): https://assets.publishing.service.gov.uk/ media/695e3c022a4a53b73d51380f/ our-plan-for-small-and-medium-sizedbusinesses.pdf
52 FSB, Ready to Dispatch: Enhancing support for ambitious and aspiring small exporters (2024): https://issuu. com/federationofsmallbusinesses/docs/ reportexportfinal?fr=xKAE9_15JNQ
53 Federation of Small Businesses, Open for Business, 2021: https://www.fsb. org.uk/static/0b9d6f93-f2e4-4470ba33c8965fe3c454/Open-for-BusinessHow-business-advice-for-small-firmsaffected-the-COVID-19-recovery.pdf
54 McKinsey & Company, A.Albaz, M.Dondi, T.Rida and J.Schubert, Unlocking growth in small and medium-size enterprises, 2020: https://www.mckinsey.com/industries/publicsector/our-insights/unlocking-growth-insmall-and-medium-size-enterprises
55 Enterprise Research Centre, The State of Small Business Britain, 2023: https:// www.enterpriseresearch.ac.uk/wp-content/ uploads/2024/02/The-State-of-SmallBusiness-Britain-2023-V2.pdf
56 Department for International Trade, The Impact of Publicly Funded Export Promotion Services, 2021, p7: https:// assets.publishing.service.gov.uk/ media/6194cf618fa8f5037ffaa0a2/ the-impact-of-publicly-funded-exportpromotion-services-a-systematic-reviewprepared-for-dit.pdf
57 Those that have concluded a mutual assistance agreement that is similar in scope to the Recovery Directive (2010/24/EU) and VAT Administrative Cooperative Regulation (904/2010).
58 Council Implementing Decision 2021/942
59 The reason for this is the GBP 5000 tax debt recovery threshold provided for in the TCA VAT Protocol, which is higher than the EUR 1500 threshold established in the Recovery Directive.
60 Netherlands Government, VAT for nonresident businesses (accessed 24.2.2026): https://business.gov.nl/regulations/vatbusinesses-outside-netherlands/
61 FSB, Customs Clearance
62 FSB, Windsor Framework realities
63 New Economics Foundation and UCL European Institute, The cost of data inadequacy: the economic impacts of the UK failing to secure an EU data adequacy decision (2020): https://new-economicsf. files.svdcdn.com/production/files/NEF_DATAINADEQUACY.pdf
64 House of Commons Foreign Affairs Committee, From a Common Understanding to Common Ground: Building a UK-EU Strategic Partnership fit for the future (4.3.2026): https://committees.parliament. uk/publications/51939/documents/288246/ default/
65 Cabinet Office, Policy paper: UK-EU Summit – Common Understanding (accessed 25.2.2026): https://www.gov.uk/ government/publications/ukeu-summit-keydocumentation/uk-eu-summit-commonunderstanding-html
66 Norwegian Ministry of Foreign Affairs, The EU/EEA Handbook (23.5.2025): https:// www.regjeringen.no/no/dokumenter/eueoshandbok/id3102387/
67 Norwegian Ministry for Digitalisation and Administration, Ønsker innspill fra norske aktører til Europakommisjonens forslag til «Digital Networks Act» (10.2.2026): https://www.regjeringen.no/no/aktuelt/ onsker-innspill-fra-norske-aktorer-tileuropakommisjonens-forslag-til-digitalnetworks-act/id3148738/
This report is dedicated to the memory of Neil Warwick OBE (1968-2025) Policy Champion for Trade and International Affairs
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