Nearly two thirds of all UK small and medium-sized businesses are not interested in exporting, according to the latest quarterly Close Brothers Business Barometer. Of those considering exports just over half believe the European Union (EU) has the opportunities they need. The rest are mainly looking to the Middle East and Asia.
Meanwhile the government is working to encourage more businesses to export, and has set a target of £1 trillion of total exports per year by 2020, with 100,000 more businesses involved. If your bookkeepers agree that your business has exporting potential, help is available from the UK Trade and Investment (UKTI) organisation, which has a network of International Trade Teams across the country, and representatives around the world, to provide advice and support to potential, novice and experienced exporters alike. They also assist companies to participate in international trade fairs through their Trade Show Access Programme. One small UK company recently reported £100K worth of sales in one day at a trade fair in Germany, plus a number of orders for the future.
Pros and Cons of the EU
They recognise that, for many small firms the freedom of movement of goods and services across the EU offers many advantages. The Federation of Small Business (FSB), in its response to the government’s consultation on the free movement of goods, said that it believes these advantages far outweigh the disadvantages, such as the imposition of standards. It did, however, recommend that standards should be ‘created with the small business perspective in mind’, and should be ‘simple and cheap to implement’ in order to encourage more trade.
A big challenge in cross-border transactions is the complexity of VAT rules, which your outsourced bookkeepers will be aware of, and which the FSB recommended should be addressed. Some small companies have also complained that, although legislation is mostly harmonised, they find the paperwork around certificates of origin and EU preferential rates agreements with certain countries particularly onerous.