More than half of British businesses are finding it difficult to grow sales in Europe, with trade frictions worsening despite the UK-EU Trade and Co-operation Agreement (TCA), according to research from the British Chambers of Commerce (BCC).
A survey of 989 firms, 96% of which were small and medium-sized enterprises, found that 54% of exporters believe the TCA has failed to help them increase sales in the UK’s largest overseas market. This represents a 13 percentage-point rise compared with last year, highlighting concerns that Brexit-related barriers are becoming more restrictive over time.
Only 16% of businesses reported that the EU deal had helped them expand sales, while almost none felt government support in navigating post-Brexit trade rules had been adequate. Companies cited ongoing customs bureaucracy, VAT complexities, and restrictions on staff mobility as key obstacles. Food, drink, and agricultural exporters also reported difficulties caused by sanitary and phytosanitary (SPS) checks at EU borders.
Steve Lynch, director of international trade at the BCC, said: “Problems with trade friction appear to be worsening, not improving. With a budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a political choice. Businesses want clarity, certainty and delivery at pace in 2026, alongside a clear vision for how trade with Europe will actually improve.”
The BCC urged ministers to prioritise practical reforms next year, including closer co-operation with the EU on VAT, simplified customs procedures, and a deeper SPS agreement to reduce paperwork and delays. It also expressed concern over delays in ending the de minimis import exemption, which allows low-value overseas shipments into the UK without duties. Chancellor Rachel Reeves has indicated this exemption will not be removed until 2029, a timeline business groups say leaves UK retailers exposed to unfair competition from international e-commerce platforms.
The survey comes as Prime Minister Keir Starmer pursues a “reset” of UK-EU trade relations. However, business groups warn progress has been slow and that unresolved red tape continues to hinder exporters. Senior Labour figures have suggested that closer alignment with the EU could become an electoral issue, even though Starmer has ruled out rejoining the customs union.
There are tentative signs of broader economic optimism. Lloyds Bank’s business confidence index rose to a four-month high in December, while consumer confidence improved after months of pre-budget uncertainty. Exporters, however, say that without tangible reductions in trade barriers, domestic optimism will do little to unlock growth in Europe.
A government spokesperson said ministers are making “strong progress” in EU negotiations, including plans for a food and drink agreement and linking UK-EU emissions trading systems. The measures, officials said, could add nearly £9 billion a year to the economy by 2040.
Despite these assurances, many UK exporters remain unconvinced, warning that Europe will continue to be a growth opportunity largely out of reach unless trade frictions are addressed swiftly.
