UK small and medium-sized enterprises (SMEs) are experiencing the highest levels of economic strain in Europe but remain comparatively confident in dealing with regulatory shifts, according to new research from Wolters Kluwer Tax & Accounting.
The findings are part of the company’s first Future Ready Business report. It is based on responses from more than 1,000 SMEs across Belgium, Denmark, Germany, Italy, the Netherlands, Spain, Sweden and the UK.
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According to the research results, more than half of UK SMEs (56%) identify challenging economic conditions and rising costs among their three biggest concerns for the year ahead. This is significantly above the survey’s European average of 40%.
Despite this, UK respondents report higher levels of readiness for regulatory change than their continental counterparts.
Almost half (44%) say they are fully prepared for regulatory developments, putting them ahead of the other European markets covered in the study.
The report also points to the rapid integration of AI into day-to-day operations.
Around 65% of UK SMEs state they use AI tools either daily or weekly, suggesting that using these technologies is becoming routine for businesses, placing the UK ahead of several other European countries in terms of adoption.
Additionally, UK SMEs appear to continue to place strong emphasis on external expertise when making technology and operational decisions.
Some 73% rank IT and technology service providers among their top two sources of guidance on technology choices, followed by accountants and business service providers at 57%.
Around 75% of UK SMEs say they outsource at least one business function, while 84% report very high loyalty to their chosen service providers, according to the findings.
One in three UK SMEs (33%) identify the recruitment and retention of skilled staff as a leading priority, and 26% place talent issues among their top three business challenges.
Wolters Kluwer Tax & Accounting Europe executive vice-president and managing director Bas Kniphorst said: “UK SMEs are under more economic pressure than any of their European peers, but they are responding differently.
“UK SMEs stand out for prioritising regulatory readiness and leaning heavily on trusted advisors to navigate complexity.
“They are taking a selective, pragmatic approach to digital investment, focusing on tools that deliver fast efficiency and control to build resilience even as cost pressures remain high.”
