The impact of Brexit on UK startups remains a live issue almost five years after the transition period ended. Every founder now operates in an environment shaped by new trade rules, visa routes and support schemes. Tariff-free access to EU markets can no longer be taken for granted, and compliance work that once felt routine now carries extra cost. At the same time, fresh opportunities are emerging, from simplified customs reliefs to government grants that focus squarely on firms willing to expand beyond Europe.
This blog sets out what has changed since 2021, the pressure points we see daily in the accounts we prepare, and the practical steps that keep new businesses on the front foot. We draw on the latest data so that you can benchmark your plans: UK goods exports to the EU fell to £174.4bn in 2024, down 6.5% on the previous year (ONS, 2025). More than 70m customs declarations were filed in 2023/24, the highest on record (HMRC, 2024). And the Office for Budget Responsibility still expects long-run productivity to be 4% lower than if we had stayed in the EU (OBR, 2024).
For founders, those numbers translate into tighter margins, slower purchase cycles and tougher funding rounds. Yet with the right adjustments, many startups are finding new buyers, winning UK-based grants and building resilient supply chains. Here is what you need to know.
Why the impact of Brexit on UK startups still matters in 2025
The headline trade deal removed tariffs on most goods, but it also introduced rules-of-origin tests, safety certificates and VAT duties that did not exist before. These changes hit startups harder than large corporates because early-stage teams often lack the compliance staff to absorb extra red tape. Add rising wage bills and interest rates, and the need to master post-Brexit regulations becomes a make-or-break task.
If you intend to sell software or services, the focus shifts to data adequacy and professional-qualifications recognition. While the UK secured an EU adequacy decision for data protection, the ruling is due for review in 2026, so tech startups must keep their transfer processes watertight.
New rules at the border: Trade and customs
Customs declarations: Every export to the EU now needs a customs document. The move from the CHIEF system to the Customs Declaration Service means you must obtain a GB EORI (Economic Operators Registration and Identification) number, understand commodity codes and track duty deferment accounts.
Authorisation by declaration: From summer 2025, importers can use this simplified relief 10 times a year rather than three, easing cashflow for small consignments (HMRC tax update, 2025).
Practical tips
- Map supply chains: Identify every EU touch-point and review incoterms (international commercial terms) so that duty liabilities sit where you expect.
- Register for postponed VAT accounting: This avoids paying VAT at the border and claiming it back later.
- Use inward processing relief: Suspend duties on goods you re-export, reducing costs while you scale.
Funding landscape after EU departure
Horizon Europe participation finally reopened in 2024, but the UK guarantee will expire in 2026. Founders should weigh its competitive terms against home-grown initiatives such as the following.
- Innovate UK smart grants: Quarterly calls worth up to £2m per project.
- British Business Bank Future Fund: Follow-on funding for high-growth, research-intensive firms.
- Regional growth deals: Northern Powerhouse Investment Fund II offers loans from £25k to £5m.
Equity investors remain alert to the extra trade friction. Demonstrating an export plan that sidesteps delays – or focuses on non-EU markets – often speeds up due diligence. Our corporate finance team can review pitch decks and forecast scenarios.
Hiring talent in a post-Brexit market
The new points-based system treats EU and non-EU nationals alike. Startups must now do the following.
- Hold a sponsor licence: Lead times can be eight weeks, so apply early.
- Budget for the immigration skills charge: £1,000 per employee, per year for most roles.
- Track salary thresholds: General skilled worker minimum is £38,700 from April 2025.
Remote-first firms may bypass visas, but they still face payroll and permanent-establishment rules abroad.
Practical steps: How startups can adapt fast
- Plan cashflow: Build an 18-month forecast that flexes duty costs and settlement delays.
- Segment markets: Prioritise EU-free channels in the short term, but keep optionality for future growth.
- Tighten documentation: Commercial invoices must state origin, value and Incoterms – errors trigger fines.
- Invest in digital customs tools: Automate commodity-code look-ups and duty calculations.
- Upskill the team: Short courses on border processes pay for themselves once the first shipment clears without a hitch.
Take the next step with us
Brexit has reshaped how new ventures trade, hire and raise capital, but it has not shut the door on growth. By treating the extra rules as a checklist rather than a hurdle, founders can turn compliance into a competitive edge and secure funding with greater confidence. We monitor every policy update and feed practical actions straight into our advice, accounts and grant applications.
If you want clear guidance on the impact of Brexit on UK startups – and a plan tailored to your numbers – contact us at PB Syddall & Co. We will review your forecasts, customs workflow and funding options, then lay out next steps. Let’s keep your startup moving forward.