68% find Europe their most complex market, as uncertainty slows expansion

LONDON — February 12, 2026 — New research from Avalara, Inc., the agentic tax and compliance leader, has found that UK businesses surveyed remain committed to international growth, despite rising uncertainty and mounting friction with Europe making cross-border expansion more difficult.

• Read Avalara’s 2026 Cross-Border Chaos Report here.

The 2026 Cross-Border Chaos Report reveals that British companies are scaling back expansion plans because their confidence in stable trade rules has weakened. More than 8 in 10 leaders (82%[1]) say cross-border operations are more complex than a year ago, 7 in 10 (71%[2]) say trade is more complex than it was three years ago, and more than two-thirds (68%) now view Europe as their most challenging trading partner. Just 37% are actively expanding internationally.

With this trust in policy stability declining, UK firms are increasingly relying on technology to restore certainty. (83%[3]) now use AI in cross-border operations, with automation and intelligent compliance systems becoming central to managing risk, navigating regulatory change and sustaining growth. Today’s report pinpoints a major shift in how UK firms approach international expansion, focusing on technology for stability and predictability.  

“While Europe continues to be an important market for UK businesses, it has also become one of the most complex,” said Craig Reed, GM of Cross-Border at Avalara. “As rules grow more fragmented and fast-changing, technology becomes the only true source of stability. Businesses that invest in intelligent compliance systems will be best positioned to compete on the global stage.”

Other findings from the Cross-Border Chaos Report include:

Europe is now UK businesses’ greatest test: Despite Europe’s proximity and commercial importance to the UK, British firms face multiple friction points. More than half (53%) pointed to tariffs and duties as their top burden for cross-border operations, while 38% of businesses struggle with border processes and regulatory change. As such, many UK firms will be reassessing their supply chains, compliance infrastructure and growth priorities in response to this complexity.

Compliance is reshaping expansion decisions: Compliance is now a decisive factor in where and how UK businesses grow. Regulatory change after market entry is viewed as a major risk by nearly half of respondents (49%). The financial and operational burden of managing trade rules is also forcing companies to be more selective, delaying (40%) or downsizing market entry plans (17%) to avoid costly missteps.

The full 2026 Cross-Border Chaos Report, including regional breakdowns and industry insights, is available to download at: newsroom.avalara.com/image/Avalara+Cross-Border+Chaos+Report.pdf

About the Cross-Border Chaos Report

Avalara commissioned Censuswide to survey 1,500 senior business decision‑makers within businesses / retailers that trade and / or sell goods cross-border across the U.S., UK, India and Australia. The data was collected between January 13 – 20, 2026. Censuswide is a member of the Market Research Society (MRS) and the British Polling Council (BPC), and a signatory of the Global Data Quality Pledge. We adhere to the MRS Code of Conduct and ESOMAR principles.

About Avalara

Avalara is the agentic tax and compliance leader. For more than two decades, Avalara has developed one of the most expansive libraries of tax content and integrations in the industry, supporting over 200,000 direct and indirect customers across more than 75 countries. The company's purpose-built AI agents automate end-to-end compliance processes with greater precision, from tax calculations and return filings to exemption certificate management and beyond. For more information, visit Avalara.com.