Nearly seven in ten small and medium enterprises (SMEs) in the UK experience barriers to export, according to Hitachi Capital’s Business Barometer.

In a study of 1,139 British-based SMEs, 69% said they faced difficulty exporting their goods. Paperwork, which included managing customs duties, and legislative difficulties were the primary reasons SMEs gave for their export woes, with 26% and 24% respectively.

Across all of the business areas, issues with paperwork and difficulties with laws and regulations in other countries largely dominated.

Among SMEs involved in manufacturing, 37% reported that paperwork restricted export, while 20% of those in construction and 33% in agriculture blamed legislative barriers.

"Paperwork, lack of knowledge, and legislation hindering business growth appear to be the biggest hurdles that small business face when exporting," said Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance.

"It is key that SMEs understand the rules and regulations of the country the business is exporting to."

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The reasons given for export difficulty showed regional variation, with 25% of London-based SMEs and 26% of those in the North citing legislative difficulties as a main issue, compared to 15% in the East of England.

The UK export market has continued to grow, totalling £44.9bn (€52.8bn) in June 2016, for the fastest growth since February 2010.
However, there are questions about how that the outcome of the UK’s referendum on EU membership may impact the export market, particularly given a potential change to legislative circumstances and the impact on customs tariffs.

"The biggest export market for the UK is Europe," said Hitachi Capital. "[Brexit] could affect the UK small business economy even further."

Following the referendum result, one fifth of construction SMEs reported difficulties with foreign rules and regulations. However, Wraith-Carter sees increased opportunities for export outside of Europe.

"Despite the UK’s impending exit from the EU, overseas markets still represent an attractive option for many small companies," Wraith-Carter continued.

"Emerging economies such as India, China, and the Middle East all have potential to significantly expand the available market for SMEs."