The Chancellor announced the designation of eight areas across Great Britain that will become Freeport locations. These locations will benefit from a range of tax reliefs to encourage investment.

 The Freeport locations will be:

  • East Midlands Airport
  • Felixstowe & Harwich
  • Humber
  • Liverpool City Region
  • Plymouth
  • Solent
  • Thames
  • Teesside

The government will have the power to designate further areas as Freeports as required. The Freeport sites will benefit from the following tax incentives:

Capital Allowances

  • Qualifying expenditure on Plant & machinery (P&M), incurred on or before 30 September 2026, will benefit from a 100% First Year Allowance (FYA).
    • The P&M will need to be used primarily in the Freeport site.
  • Qualifying expenditure on buildings or structures will benefit from enhanced Structures & Buildings Allowances (SBAs).
    • The allowance will be 10% per annum, across a period of 10 years.
    • The expenditure must have been incurred on or before 30 September 2026.
    • The structure or building must have been first brought into use on or before 30 September 2026.
  • In order to qualify for the enhanced allowances, the claimant must provide HMRC with any information necessary to the claim. Failure to provide such information will give rise to penalties.

Stamp Duty Land Tax (SDLT)

  • Land transactions relating to qualifying Freeport land will be exempt from SDLT.
    • Qualifying land is situated in a Freeport site and exclusively used for a qualifying purpose. Qualifying purpose includes being used in a commercial trade or profession and not for residential purposes.
    • To qualify for the full exemption, at least 90% of the consideration must be attributable to the Freeport land.

Business rates

  • There will be five years of full business rates relief for all new businesses setting up in Freeport designated sites.
  • The relief will extend to certain businesses expanding into Freeport areas.
  • The relief is available until 30 September 2026.

Employer NIC Relief

  • It is proposed that there will be a relief for Employer NICs for qualifying employees working in Freeport sites.
  • The relief will be available from April 2022 (or the start of the site designation if later) and is anticipated to last until at least April 2026. There is an intention to extend this for a further five years until April 2031.
  • This proposed measure needs to be approved by Parliament.

Useful guides on this topic

Budget 2021: At a glance
The Budget 2021: at a glance. A summary of key budget announcements together with items published without announcement.

Freeports: tax breaks
The government has provided details of new tax breaks, confirmed in the Budget 2021, for business seeking to locate and operate in a Freeport. Tax breaks cover Stamp Duty Land Tax (SDLT), Capital Allowances, National Insurance and business rates.

External links

Finance Bill 2021

Budget 2021: Protecting the jobs and livelihoods of the British people 

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