Nearly 10% of UK small businesses have halted international trade in the last five years due to complex customs paperwork, rising costs, and disrupted supply chains, according to a new Federation of Small Businesses (FSB) report.
The Customs Clearance report highlights the challenges faced by small firms, including high shipping costs (61%) losses and delays in transit (56%) and insufficient guidance on customs processes (45%).
It also shows that the volume of paperwork (56%), overall cost burden (49%) and supply chain and logistical issues (29%) put small firms off from trading internationally.
With 81% of small firms impacted by the global supply chain disruptions caused by the Russian invasion of the Ukraine, FSB is calling for additional Government support.
Key recommendations include urging the Government to open a Single Trade Window, an online portal that will bring a ‘once and done’ approach to Government collection of the data traders need to provide to export or import.
Other suggestions include targeting resources towards small firms with high export potential, passing and implementing the Electronic Trade Documents Bill to promote digital trade documentation, and adopting a “think small first” approach to customs policy development.
Europe remains the top export and origin market for small UK businesses, with Ireland being the most popular trading partner for small exporters, followed by Germany and France. In terms of imports, Germany, the United States, and China are the three most popular origin markets for small UK firms.
FSB Policy & Advocacy Chair Tina McKenzie said: “Small Businesses are keen to expand overseas, but face barriers that hinder their growth potential. Costly, time-consuming, and complex customs processes discourage them from entering the foreign markets.
“However, with the right support and guidance, these firms can thrive in the global market. As an independent trading nation, the UK has a unique opportunity to create an effective trade infrastructure centered on small businesses.”