The government has published ‘Freeports, Response to the Consultation’, as it continues to develop one of its flagship policies on the creation of new freeports in England.
A freeport is a zone within a country that is identified as being outside its home country for customs purposes. Goods or components can come in and out tariff-free, only incurring duties at the point of export.
The UK Freeports' plan includes a single contiguous defined site within which Freeport tax reliefs will apply.
Within a freeport:
- There will be simplified customs and tariff procedures and benefits.
- Import VAT will be suspended and Postponed VAT Accounting (PVA) will work in tandem.
- Buying and selling of goods will be duty-free if both the buyer and seller have the same customs authorisation.
Further tax reliefs are being considered:
- Business rates relief.
- Enhanced Capital Allowances (ECAs) and Structures and Buildings Allowance (SBA).
- Stamp Duty Land Tax (SDLT) relief.
- National Insurance Contributions (NICs) relief for eligible employees who are based in that site.
The report accepted that other tax reliefs and allowances are currently being developed. Further details, such as the timing, scope and rates of relief of these measures, will be set out later in a 'Bidding Prospectus'.
Freeports and Freeport businesses will also be able to bid into UK Research and Innovation (UKRI) national ‘Place-based’ R&D funds.
The orginal freeports consultation was published on 10 February and was due to close on 20 April but was extended until 13 July 2020 in response to COVID-19.
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