Figures show new EU-wide sales law will make it easier for small firms to trade within EU

THE Federation of Small Businesses (FSB) has welcomed an optional European common sales law as new figures show that it would make small firms’ lives easier for nearly a fifth of businesses that sell online to other EU countries.

The FSB has been calling on the Government to support plans for a Europe-wide sales law that small businesses can use when drawing up contracts within the EU.

Amir Butt, Peterborough Branch Chairman, Federation of Small Businesses, said: “An optional EU-wide sales law is clearly the only way to solve the legal barriers small firms face when selling in the EU – so it is welcome news that this is now proposed. Currently, small businesses could have to spend thousands of pounds on legal advice to get to grips with local laws and they clearly cannot afford this. Without this, small firms could continue to just trade exclusively in the UK, something which would not support the Government’s plans for an export-led recovery.”

Figures from the FSB’s ‘Voice of Small Business’ survey panel show 43 per cent of respondent’s trade cross-border via the internet, however legal or fiscal obligations and sales disputes are barriers to selling online. So it is welcome news that the EU is proposing an optional EU-wide sales law – as 18 per cent of businesses said it would make their life easier.

While the FSB supports the Government’s development of the Single Market it is also concerned that the barriers and burdens small businesses face when looking to trade across borders are putting them off. A quarter of FSB members trade overseas, 87 per cent of them with other EU countries – 14 per cent of which said legal barriers are a disincentive to trade across borders.

The EU sales law will help to fix this and reduce barriers to cross-border trading.

An EU-wide sales law will also encourage small businesses to use contracts. If a small business has a contract, it stands on firmer ground when asking for timely payment under the late payment directive, helping to improve its cash-flow.