Last updated 28th April 2020
The business consequences of the Coronavirus are manifold across all sizes and sectors, and the disruption is likely to continue in the months ahead. In recent weeks the Government has announced a package of measures to support a broad range of firms in mitigating the detrimental impacts of the virus.
The latest figures from the Office of National Statistics show that almost two-thirds of UK GDP derives from international trade. Policy Voice surveys suggest around two-thirds of IoD members export – this is much higher than the UK national average which hovers around 10%. This is an explainer on the recently-announced Government measures for UK businesses that trade internationally.
This is a fast-moving situation and as such we will aim to keep this page up-to-date.
What are the key measures to note for businesses trading internationally?
Department for International Trade support
DIT can help companies by providing assistance with customs authorities in order to allow smooth clearance of goods and by offering guidance on intellectual property and other matters related to business continuity.
UK businesses that could potentially experience disruption as a result of COVID-19 can visit the government’s Business Support website for guidance. DIT says it can discuss the difficulties faced by UK firms at home and abroad in order to gauge how best the department can assist them.
DIT can assist businesses whose supply chains are affected by the outbreak to find alternative suppliers. The department has contacts with businesses around the world and is able to tell you what options are available.
If your business is a professional services or advisory firm that can help British companies locate alternative suppliers, please visit the government’s Business Support website for details.
Companies may also wish to refer to the government’s page on support schemes for businesses related to the Coronavirus.
You may also wish to contact your local DIT office. There are 170 International Trade Advisers at DIT. In order to find an Adviser in your area, use this search function.
The government has produced Coronavirus guidance for businesses trading internationally.
The Government has established a substantial package of state-backed and guaranteed loans to support UK businesses. We would encourage you to read the full guidance to gauge which measures would be most suitable to your particular business. Some of the key support schemes are:
- The Coronavirus Job Retention Scheme sees the government paying 80% of workers’ wages, up to a monthly ceiling of £2,500
- VAT payments between now and the end of June will be deferred, and income tax payments under Self-Assessment that are due in July 2020 will be deferred to January 2021
- The Coronavirus Business Interruption Loan Scheme, administered by the British Business Bank, provides financial support for SMEs that are losing revenue and seeing cash flow disrupted as a result of the pandemic
- The Coronavirus Large Business Interruption Loan Scheme, the equivalent of the above scheme for mid-sized and larger businesses
- The Coronavirus Bounce Back Loan Scheme, which helps small businesses to access a loan worth £2,000 to £50,000 interest-free for the first 12 months
- Package for innovative firms, including the Future Fund, for high-growth firms and SMEs focused on research and development
- Statutory sick pay will be made payable from the first day of sickness rather than the fourth day
- HMRC’s ‘Time to Pay’ helpline has been launched, allowing businesses to, on a case-by-case basis, potentially receive financial support in paying their taxes – the helpline number is 0800 024 1222
- Additionally, HMRC may waive penalties related to late payments and interest in cases where a business has difficulties in contacting HMRC or paying taxes
- A package worth £1.25 billion for innovative firms, which includes the Future Fund, to support SMEs focused on research and development and high-growth firms
- The Business Rates Retail Discount in England will be extended to 100% for the duration of a year to the hospitality and leisure sectors
- The minimum income threshold for Universal Credit will be temporarily lowered for individuals with COVID-19 or self-isolating following official guidance
- Cash support for all companies receiving Small Business Rate Relief and funding for Local Authorities in England to help firms that pay little or no business rates due to SBRR or Rural Rates Relief
- Cash grants of up to £25,000 will be open to companies in leisure, hospitality and retail, with a rateable value of £15,000 to £51,000
- Grants on offer through the Self-Employment Income Support Scheme.
UK Export Finance offers guarantees, loans and insurance to British exporters experiencing transit constraints or delayed payments. In order to find out if UKEF covers your region, contact firstname.lastname@example.org. Assistance from UKEF includes:
- The Export Working Capital Scheme helps to relieve cash flow problems by providing guaranteed loans for companies that experience late payments
- The Direct Lending Facility Scheme can support overseas buyers, so that they can continue to purchase your company’s goods and services
- For companies worried about getting paid, an export insurance policy can assist in covering costs of fulfilling an order that is cancelled due to circumstances outside of your control - now covers the EU, US, Japan, Australia, New Zealand, Canada, Iceland, Norway and Switzerland
- More than £4 billion for UK companies exporting to China, in addition to increased capacity in other markets impacted by COVID-19.
The Government has implemented a series of easements designed to help traders in light of the Coronavirus. Below is a summary of the temporary changes, but please do read the official government guidance for detailed information.
The Government has made temporary changes around waiving import taxes on medical equipment which is important to fighting the Coronavirus, including ventilators, protective clothing and Coronavirus testing kits.
The Government has made temporary changes around transit and export procedures. The areas affected include -
Border functions and social distancing:
- Exchanging transit and export documents - e.g. traders, their agents and Border Force should exchange documents electronically.
- Export Approvals - traders may apply for permission to extend the authorisation to additional locations
- Transit movements starting at an office of departure - e.g. traders may now request the release of the goods by contacting the relevant office of departure
- Transit movements starting at an authorised consignor - authorised consignors may apply for permission to extend the authorisation to additional locations
- Transit movements ending at an office of destination - traders may now request the release of goods from the transit procedure by contacting the relevant office after the goods have arrived
- Transit movements ending at an authorised consignee - authorised consignees may not communicate and exchange documents with Border Force by telephone, fax or email
Changes to the way you operate:
- Exports less than €3000 in value - if you have a consignment which is less than this value and is not subject to promotions or restrictions, it can be declared for export in the UK even if the exporter is established in the EU27
- Delays during transit of your goods - in light of anticipated delays, the New Computerised Transit System will accept journey times of up to 14 days
Completing supplementary declarations:
- In the event that you are not able to accurately calculate your supplementary declaration by your due date due to the pandemic, you may submit an estimate figure. If your declaration includes a value of Excise duty, you are required to submit a supplementary declaration as normal.
The Government has made temporary changes around customs authorisations. The changes may affect you should you be authorised or apply to be authorised by customs to:
- use temporary storage or customs special procedures e.g. inward processing or customs warehousing; allowing an authorisation holder to apply to extend their authorisation to other locations
- use simplified declarations e.g. entry in your records
- have a guarantee
- operate as an Authorised Economic Operator (AEO)
The changes include allowing you to apply to temporarily vary the conditions your authorisation and providing for changes to the application process for authorisations.
The Government has made temporary changes around duty payments e.g. claims where the direct debit has been taken where businesses have contacted HMRC to ask for 'time to pay':
Q: If a direct debit has been collected from a customer that tried to agree an extended payment arrangement with HMRC but was unable to get through, can the direct debit be paid back to the customer?
A: Customers who emailed the Central Deferment Office, or who otherwise tried unsuccessfully to contact HMRC, to request an extended payment arrangement before the deadline, but had their direct debit collected on 15 April, should email the Central Deferment Office at email@example.com . The subject of the email should be ‘COVID-19 deferral’ and it should explain briefly how COVID-19 is affecting the business’s finances to the extent that they need to claim back the amount collected on 15 April. Claims under the Direct Debit Guarantee can only be considered for customers who made a genuine attempt to contact HMRC and qualify for an extended payment arrangement. They should be able to evidence the failed attempt to contact HMRC if asked (e.g. through telephone records/copies of emails) and will be expected to pay immediately as much of the amount owed as possible, where this does not create severe financial hardship.
The Government has made temporary changes around wet signatures. These include allowing traders to claim preferential tariff rates using a copy of the original preference certificate held by the declarant. For more information, you can view government guidance here and here.
If your business is operating projects abroad, consult local guidance and contact the nearest UK embassy. You may also wish to consider advice on Overseas Business Risk in the relevant country.
Please consult Foreign and Commonwealth Office travel advice for the latest on travel warnings, entry requirements and safety and security information.
How the IoD can help
Let us know what steps you think Government should take to support businesses trading internationally. We are in direct contact with the heart of Government, and want to make your voice heard.
Email the policy unit
Covid-19: Government support for UK businesses trading internationally
Foreign and Commonwealth Office official travel advice
Contact your nearest UK embassy
IoD explainer on government support for SMEs
IoD explainer on government support for the self-employed
Government Coronavirus Business Support page
Covid-19: Government support for employers
Government guidance on travel
IoD article on globalisation, Coronavirus and trade
Claudia Catelin, EU & Trade Policy Adviser
Claudia joined the IoD in August 2017 to work on EU and trade policy. Previously, she worked at the American Chamber of Commerce in Belgium and in the Board of Directors at the European Bank for Reconstruction and Development.
Claudia also formerly worked for Newsfirst as French news editor. Claudia has Australian and British citizenship and a Master of Science in European Studies from the London School of Economics. She is fluent in French and Spanish.