Quick Answer: What Small Businesses Need to Know About Post-Brexit Trade
Post-Brexit EU-UK trade in 2025 requires small businesses to navigate complex new VAT implications, ATA Carnet systems, and evolving import regulations under the Windsor Framework. Key changes include Safety and Security declarations for all EU imports from 31 January 2025, continued CE marking acceptance indefinitely in Great Britain, and simplified ATA Carnet procedures for temporary exports to the EU covering 27 countries with a single 12-month document.
Essential Changes for Small Businesses:
- Safety and Security declarations mandatory for all EU imports to UK from 31 January 2025
- ATA Carnet system now required for temporary exports to EU since 1 January 2021
- CE marking remains valid indefinitely in Great Britain alongside UKCA marking
- Windsor Framework introduces “green lane” and “red lane” system for Northern Ireland trade
- Border Target Operating Model (BTOM) phases in enhanced biosecurity controls through 2025
- VAT postponed accounting available for UK businesses importing from EU
- New Trusted Trader programmes offer reduced border checks for authorised operators
Understanding Post-Brexit VAT Implications
Post-Brexit EU-UK trade fundamentally changed VAT procedures for businesses trading across the channel. Since 1 January 2021, the UK operates outside the EU VAT area, creating new obligations and opportunities for small businesses.
UK Import VAT Changes
When importing goods from the EU, UK businesses now face import VAT charges at the border. However, the Postponed VAT Accounting (PVA) system provides crucial cash flow relief for VAT-registered businesses.
Under PVA, businesses can:
- Record import VAT on their VAT return instead of paying upfront at the border
- Reclaim the VAT as input tax on the same return (if eligible)
- Maintain better cash flow management
- Avoid delays at customs checkpoints
Key requirement: Businesses must be VAT-registered in the UK to use PVA. Non-registered businesses must pay import VAT immediately upon importation.
EU VAT Registration Requirements
UK businesses selling to EU consumers now face different VAT thresholds. From 1 January 2025, UK businesses providing digital services to EU consumers will be subject to VAT where the customer resides, with no turnover threshold for non-established businesses.
The One Stop Shop (OSS) scheme allows businesses to register in one EU country and report sales across all 27 member states through a single quarterly return. This significantly reduces administrative burden compared to registering separately in each EU country.
Northern Ireland VAT Under Windsor Framework
The Windsor Framework allows the UK Government to set VAT rates for ‘immovable goods’ such as heat pumps, and tax certain alcoholic beverages. The EU VAT scheme for small enterprises (applying from 2025) will not apply in Northern Ireland.
This creates a unique dual system where Northern Ireland businesses enjoy flexibility in certain areas whilst maintaining access to EU single market benefits for goods.
ATA Carnet System for Small Businesses
The ATA Carnet system became essential for post-Brexit EU-UK trade when the UK left the EU customs union. Since 1st January 2021, ATA carnets have been required for temporary export to the EU.
What is an ATA Carnet?
An ATA Carnet acts as a “passport for goods,” allowing temporary exports without paying customs duties or completing multiple documentation sets. ATA Carnet lets you temporarily export commercial samples, trade fair or exhibition goods and professional equipment to countries that are part of the ATA Carnet system.
Types of Goods Eligible for ATA Carnets
| Category | Examples | Typical Users |
|---|---|---|
| Commercial Samples | Textiles, jewellery, machinery parts | Sales representatives, trade missions |
| Professional Equipment | Tools, cameras, musical instruments | Technicians, performers, consultants |
| Exhibition Goods | Display items, demonstration products | Trade fair exhibitors, artists |
ATA Carnet Benefits for Small Businesses
An EU ATA carnet gives border-free access across 27 countries and can be used for as many visits as you wish over a 12-month period. This provides exceptional value for small businesses making multiple trips to the EU. ATA Carnets in the UK are issued by the London Chamber of Commerce and Industry and the Authorised Chamber Network.
Cost advantages:
- Single application covers all EU member states
- Valid for 12 months from issue date
- Multiple trips permitted without additional documentation
- Eliminates need for temporary import bonds in each country
- Processing typically takes 24-48 hours for standard service (2 hours for express service)
- Member discounts available from issuing chambers
Application Process
ATA Carnets in the UK are issued by the London Chamber of Commerce and Industry and the Authorised Chamber Network. The process typically takes 24-48 hours for standard service, with same-day options available for urgent requirements.
Small businesses should prepare accurate goods descriptions, including serial numbers for electrical equipment, to avoid delays at borders.
CE Marking vs UKCA Marking Requirements
One of the most significant developments for post-Brexit EU-UK trade is the UK’s decision to continue accepting CE marking indefinitely for most products in Great Britain.
Current Marking Requirements
The government has laid legislation to continue recognition of current EU requirements, including the CE marking. This means businesses will have the flexibility to use either the UKCA or CE marking to sell products in Great Britain.
This policy change provides crucial flexibility for small businesses, eliminating the previously planned mandatory switch to UKCA marking from 1 January 2025.
Dual Market Strategy
For businesses selling in both markets:
EU Market Requirements:
- CE marking mandatory for regulated products
- EU Declaration of Conformity required
- EU Authorised Representative needed for non-EU manufacturers
- Compliance with EU harmonised standards
UK Market Requirements:
- Either CE or UKCA marking accepted
- UK Declaration of Conformity for UKCA-marked products
- UK Responsible Person for overseas manufacturers
- Compliance with UK designated standards (currently identical to EU standards)
Northern Ireland Considerations
Northern Ireland, the fourth UK country, is still part of the European Single Market. As such, it requires CE Marking and will not recognize UKCA Marking.
This creates a unique three-market scenario for businesses operating across the UK and EU.
Future-Proofing Your Business
Currently, UK and EU regulations are largely aligned, but the UK government has the authority to introduce independent changes over time. Small businesses should monitor regulatory developments and consider maintaining both CE and UKCA capabilities.
Photo: Thomas Lohmann
Border Target Operating Model (BTOM) Changes
The Border Target Operating Model seeks to deliver one of the most advanced trade borders in the world by streamlining import controls and minimising burdens on traders.
Phased Implementation Timeline
Phase 1 (Completed January 2024):
- Export Health Certification for EU medium-risk animal and plant products
- Pre-notification requirements through IPAFFS system
Phase 2 (Completed April 2024):
- Physical checks on medium-risk products at Border Control Posts
- Documentary verification processes
Phase 3 (31 January 2025):
- Safety and Security declarations for all import shipments from the EU
- Reduced dataset with 20 mandatory fields (down from previous requirements)
- Enhanced security screening for all goods categories
Safety and Security Declarations
From 31 January 2025, all businesses importing from the EU must provide Safety and Security declarations. The legal requirement to submit a declaration lies with the carrier. This is the operator of the active means of transport, although a third party can lodge the declaration on the carrier’s behalf with the carrier’s knowledge and consent.
Small businesses must provide:
- Accurate goods descriptions and commodity codes
- Exporter and importer details
- Transport documentation
- Health certificates (where applicable for plant/animal products)
- Only 20 mandatory fields required (reduced from previous requirements)
Trusted Trader Benefits
The 2025 UK Border Strategy set out the ambition to create a cross-government approach to authorising businesses for Trusted Trader status.
Benefits include:
- Reduced physical inspection rates
- Faster customs clearance
- Simplified documentation requirements
- Priority processing at borders
Small businesses can apply for Authorised Economic Operator (AEO) status to access these benefits, though the process requires demonstrating robust compliance systems.
Practical Solutions for Small Businesses
Cost-Effective Compliance Strategies
Simplified VAT Management:
- Use accounting software with multi-jurisdiction VAT capabilities
- Consider OSS registration for EU sales
- Implement PVA for UK imports to manage cash flow
Documentation Efficiency:
- Develop template documentation sets for regular shipments
- Maintain digital copies of all certificates and permits
- Use electronic data interchange (EDI) where possible
Professional Support Options
It’s a smart move to consult with accountants who specialise in both UK and EU VAT systems. A knowledgeable accountant can take a look at your setup, clarify which rules are relevant to your business, and manage VAT registrations or returns for you.
Small businesses should consider:
- Outsourcing customs declarations to licensed agents
- Using freight forwarders with ATA Carnet expertise
- Engaging specialist VAT advisers for multi-jurisdiction compliance
Technology Solutions
Modern border management increasingly relies on digital solutions:
- Customs management software for automated declarations
- Track and trace systems for shipment monitoring
- Digital document management for certificates and permits
Impact on Small Business Trade Volumes
Recent research reveals the disproportionate impact of post-Brexit EU-UK trade changes on smaller enterprises. 14 per cent of firms (around 16,400 firms) that had previously exported to the EU stopped doing so after the TCA came into force in January 2021. Most of the firms whose exporting business suffered were smaller ones.
Statistical Evidence
UK goods exports to the EU fell sharply in January 2021 after the end of the Brexit transition period, before recovering strongly in February 2021. Goods exports to the EU remain below their pre-pandemic/Brexit level, however: in 2024, goods exports to the EU were 18% below their 2019 level in real terms.
However, the picture for services trade presents a stark contrast: In 2024, UK exports of services to the EU were 19% above their 2019 level in real terms. Exports to non-EU countries were 23% above their 2019 level.
Adaptation Strategies
Successful small businesses have adopted several strategies:
- Focusing on higher-value, lower-volume products to offset increased transaction costs
- Consolidating shipments to achieve economies of scale
- Developing closer relationships with EU distributors to share compliance burdens
- Exploring services exports where barriers remain lower
Market Share Evolution
Although the EU’s share of total trade dipped slightly in the first two quarters of 2024, this followed a 15-year high. In Q2 2024, the EU still represented 52.6% of total UK trade. In 2024, the EU accounted for 41% of the UK’s exports (48% of goods exports and 36% of services exports) and 51% of UK imports (54% of goods imports and 45% of services imports).
This demonstrates the enduring importance of EU markets for UK businesses despite increased trading complexity.
Future Developments and Preparation
Upcoming Regulatory Changes
Several developments will affect post-Brexit EU-UK trade in the coming years:
EU ViDA Initiative (2028-2030):
- Mandatory e-invoicing for EU transactions
- Real-time reporting requirements
- Enhanced digital VAT systems
UK Single Trade Window:
- Currently paused but expected to resume with simplified interface
- Integration of multiple government systems
- Reduced data entry requirements for traders
Post-Brexit EU-UK trade – Strategic Recommendations
Small businesses should:
- Monitor regulatory updates through government channels and trade associations
- Invest in digital capabilities to handle increasing automation requirements
- Develop EU partnerships to share compliance costs and expertise
- Consider product portfolio adjustments focusing on higher-margin items
- Build contingency planning for further regulatory divergence
Long-term Market Outlook
The Office for Budget Responsibility recently reaffirmed its estimate that Brexit would reduce the UK’s trade openness by 15% compared to what might have been had the UK remained in the EU.
This “slow puncture” effect means small businesses must actively adapt rather than assuming trade patterns will naturally recover to pre-Brexit levels.
Photo: charlesdeluvio
Frequently Asked Questions
Do I need an ATA Carnet for every EU country I visit?
No, a single ATA Carnet covers all 27 EU member states for 12 months. Once validated at your first point of entry, it acts as a transit document throughout the EU.
Can I still use CE marking for UK sales after Brexit?
Yes, CE marking remains valid indefinitely in Great Britain for most regulated products. You can choose between CE and UKCA marking for the UK market.
What happens if I don’t provide Safety and Security declarations from 31 January 2025?
Your goods may be refused entry or face significant delays at UK borders. Carriers will typically require this information before accepting shipments.
Is VAT postponed accounting worth the administrative effort?
For most VAT-registered businesses, yes. PVA significantly improves cash flow by allowing you to account for import VAT on your return rather than paying upfront.
How do Windsor Framework changes affect my Northern Ireland trade?
The “green lane” system reduces paperwork for goods staying within the UK, while “red lane” goods at risk of entering the EU face standard checks.
Post-Brexit EU-UK trade – Conclusion: Navigating the New Trading Landscape
Post-Brexit EU-UK trade in 2025 presents both challenges and opportunities for small businesses. Whilst regulatory complexity has increased, new systems like ATA Carnets provide efficient solutions for temporary exports, and the continuation of CE marking acceptance offers welcome flexibility.
Success requires proactive adaptation rather than reactive compliance. Small businesses must invest in understanding the new systems, leverage available digital tools, and consider professional support where complexity exceeds internal capabilities.
The statistical evidence shows that whilst many smaller firms have struggled with the transition, those that adapt successfully can continue to thrive in EU markets. The key is viewing regulatory compliance not as a burden but as a competitive advantage that separates professional operators from less prepared competitors.
As regulatory frameworks continue to evolve, particularly with the upcoming BTOM phases and EU digital initiatives, small businesses that build robust, flexible compliance systems now will be best positioned for future success in post-Brexit EU-UK trade.
The trading relationship between the UK and EU remains substantial, with the EU accounting for over 50% of UK trade. This enduring economic interdependence provides strong foundations for small businesses willing to navigate the new regulatory environment.
References
Department for Business and Trade. (2025). Using the UKCA marking: Guidance for businesses. GOV.UK Publications.
HM Revenue and Customs. (2025). The Border Target Operating Model: Final Implementation Guide. UK Government Publications.
London Chamber of Commerce and Industry. (2025). ATA Carnet Guide for Small Businesses. LCCI Trade Documentation Services.
Centre for Economic Performance, LSE. (2024). Deep Integration and Trade: UK Firms in the Wake of Brexit. CEP Discussion Papers.
House of Commons Library. (2025). Statistics on UK-EU trade: Recent trends and Brexit impact. Parliamentary Research Briefings.
UK in a Changing Europe. (2024). What’s the story with UK trade in 2024 so far? Academic Research Publications.
European Commission. (2025). Windsor Framework: Implementation and Trade Facilitation. EC Trade Policy Documents.
Office for National Statistics. (2025). UK overseas trade statistics: EU and non-EU analysis. ONS Trade Data Series.
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