The creation of eight freeport zones across the UK has been announced in this week’s budget. While many of the freeports are situated in the North of England, Plymouth’s bid to become one of the Government’s first tax-break freeports has been successful.
The remaining freeports announced will be located at East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Solent, Thames and Teesside, aimed to help “level up” the country’s economy out of the coronavirus pandemic.
Set to begin operating from late 2021, the chancellor said businesses in these tax sites have “different rules to make it easier and cheaper to do business”.
What is a freeport – and what does it mean for Plymouth?
Becoming a freeport means sites in the city become distinct economic zones, which are not subject to the same taxes and tariffs which apply to the rest of the UK.
Businesses in these tax sites will be able to benefit from a number of tax reliefs, simplified customs procedures and further government support from the date that the freeport has been designated, until 30 September 2026:
- full relief from Stamp Duty Land Tax (SDLT) on the purchase of land or property and used for a qualifying commercial purpose;
- an enhanced 10% rate of Structures and Buildings Allowance for constructing or renovating non-residential structures and buildings;
- an enhanced 100% capital allowance rate for companies investing in plant and machinery for use in the freeport tax sites;
- full Business Rates relief will be available to all new businesses, and certain existing businesses where they expand;
- National Insurance contribution relief for eligible employees from April 2022 (or when a tax side is designated after this date).
This is fantastic news for stimulating ambitious growth opportunities and attracting significant investment to the South West region, and crucially, helping Plymouth get back on its feet after an incredibly challenging year.
Need more details?
You can find more details on the designation of the freeport tax sites on GOV.UK. If you’d like to speak to our team about what these tax changes mean for your South West business, do not hesitate to get in touch.
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