Nine of out ten small businesses say the current Brexit deal is not working for them, according to the British Chambers of Commerce.
Nearly 80 per cent of firms (77 per cent) that trade under the Trade and Cooperation Agreement (TCA) say it is not helping them increase sales or grow their business.
More than half (56 per cent) of firms face difficulties adapting to the new rules for trading goods with the EU.
Almost half (45 per cent) are having difficulty adapting to the new rules for trading services, and a similar number (44 per cent) report difficulties obtaining visas for staff.
The BCC surveyed 1,168 businesses for its Brexit report, 92 per cent were small and medium-sized businesses.
Shevaun Haviland, director general of the BCC, said: “With a recession looming we must remove the shackles holding back our exporters so they can play their part in the UK’s economic recovery.
“Businesses feel they are banging their heads against a brick wall as nothing has been done to help them, almost two years after the TCA was first agreed. The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done.”
Analysis by Aston Business School suggests that exports to the EU are 26 per cent lower than they would have been without the non-tariff barriers imposed by the TCA. There has been a sharp fall in the varieties of goods traded, which have dropped from 70,000 to 42,000 since the new rules came into effect.
The BCC has submitted 24 recommendations to the Government about how the current TCA could be improved right now before its five-yearly review in 2026.
- Create a supplementary deal with the EU which either eliminates or reduces the complexity of exporting food for SMEs
- Establish a supplementary deal, like Norway’s, which exempts smaller firms from the requirement to have a fiscal representative for VAT in the EU
- Allow CE marked goods and components to continue to be used in Great Britain after 2024
- Make side deals with the EU and member states to allow UK firms to travel for longer and work in Europe
- Reach an agreement on the future of the Protocol on Ireland/Northern Ireland with the European Commission in the early months of 2023, to stabilise our trading relationship