The government has announced that businesses in eight proposed new Freeports created across England will benefit from generous tax reliefs, customs benefits and other support, with the aim of levelling up the country by increasing economic opportunities in poorer regions.
The principle behind a Freeport is that no tariffs are paid on goods arriving there unless they travel onwards into the rest of the UK. So, provided they are then re-exported, goods arriving in the Freeport can be, for example, processed or incorporated into other products and then exported without UK tariffs becoming payable. The UK has had Freeports before, but not since 2012, when the last of seven of them was closed down.
The new Freeports are created from 9 March 2021 at locations defined as East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Solent, Plymouth and South Devon, Teesside and Thames.
The government plans include the following proposed reliefs:
- 10% enhanced structures and building allowances for building or renovating qualifying non-residential structures and buildings in a Freeport, provided they are in use by 30 September 2026. There are additional benefits for civil society organisations.
- 100% enhanced capital allowances until 30 September 2026 for qualifying expenditure on new or unused plant and machinery bought for use in a Freeport.
- No Stamp Duty Land Tax on property purchases for use in (and actually used in) a qualifying manner (as yet undefined) until 30 September 2026.
- Full Business Rates relief until 30 September 2026.
- Relief from employers’ National Insurance Contributions from April 2022 until at least April 2026.
Funds will also be made available for apprenticeships, with Freeport employers receiving £3,000 per apprentice taken on from 1 April 2021 to 30 September 2021, and other changes made.
Scotland has indicated it plans to introduce a similar scheme called ‘green ports’ and Wales is considering Freeports. The Northern Ireland Protocol means any such scheme there would have to be adapted to fit with Northern Ireland’s unique status.
Operative date
- Now
Recommendation
- Businesses and civil society organisations should investigate the pros and cons of setting up in the eight new Freeports announced for England.
This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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