In his Budget speech, the Chancellor announced the establishing of eight ‘Freeports’ in the UK. This concept is not entirely new as Freeports existed in the UK as recently as 2012. The basic concept is that a small region of the country is carved out and designated Freeport status which gives certain relaxations in taxation and customs duties as well as funding to encourage business growth.
‘Tax sites’ will be created which will provide the following benefits until 30 September 2026:
- An enhanced rate of Structural Buildings Allowance. This will allow the cost of non-residential buildings to be written off against business profits over 10 years, rather than 33.3 years as is the case at present.
- An enhanced rate of capital allowances for plant and machinery and special rate items. This will be 100% for two years from when the designation commences. Special rate items include amongst other things, fixtures integral to commercial buildings and certain high value long life assets. See also the section Companies and Businesses in respect of new capital allowances for companies.
- Full relief from stamp duty land tax for land and buildings purchased for commercial purposes.
- Full relief from business rates.
Subject to parliamentary approval, full or partial relief from employer’s national insurance contributions may be available up to April 2026, with the possibility of an extension to April 2031.
The Freeports are intended to be established from later this year in the following areas: East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth and South Devon, Solent, Teesside, and Thames. Discussions will continue with the devolved governments on establishing freeports in Wales, Scotland and Northern Ireland.