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The Freeport Zones: Plymouth

6th July 2021
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With Plymouth being named as one of the eight locations in England to be a designated Freeport, this is fantastic news for businesses in the city.   It is hoped that this will boost job opportunities in the city; enhance investment, trade and innovation; whilst attracting new businesses and investors to the area.

What is a Freeport?

A Freeport is a secure custom zone, where certain generous customs and taxation rules apply as well as relaxation of some administrative burdens for businesses. Freeports are usually located where there are shipping ports or airports.  

The areas within Plymouth that are in the Freeport zone are:

  • Langage Energy Zone
  • Devonport’s Southyard
  • Sherford Business Park

What are the tax and duties benefits?

Enhanced capital allowances

An enhanced 100% tax relief will be available for companies investing in plant and machinery for use in Freeport sites.  This will apply to purchases made on or after 1 October 2021 and until 30 September 2026. 

Enhanced Structures and Buildings Allowance

An enhanced 10% allowance is also available to companies for the constructing or renovating of non-residential structures and buildings, until 30 September 2026.

Stamp Duty Land Tax relief

Stamp Duty Land Tax is now not payable on purchases of land and property within the Freeport, a very generous relief that will be in place until 31 March 2026.

HMRC has issued guidance to clarify how claims are made for SDLT in freeports.

Business Rates relief

Full relief from business rates will also be available to new businesses set up in the Freeport.  This will also be available to some existing businesses, namely those who have relocated to a Freeport.  This relief will be in place from 1 October 2021 for up to 5 years.

Employer National Insurance relief

A 0% Employer’s National Insurance rate will also apply to salaries for new employees working in a Freeport.  To benefit, the employee must spend at least 60% of their working hours carrying out their job within the Freeport.  The relief will cover earnings of up to £25,000 per year for three years (per employee).   The intention at present is that this will be in place for up to 9 years from April 2022 but this relief will be periodically reviewed.

HMRC has issued guidance on zero-rate NI contributions in freeports.

See our separate article on NIC rates from April 2022 and the Freeport relief.

Customs

Duty deferral is available where goods remain on site at the Freeport, as well as duty inversion if goods exiting the Freeport attract a lower tariff than their component parts.

Goods that are imported to a Freeport zone, processed into finished goods and then re-exported might also be able to benefit from exemption from customs duties.  The extent of this exemption will depend on the specific terms of the relevant UK trade agreements.

HMRC has issued guidance on moving goods in and out of a freeport site.

Suspended VAT

There will also be a suspension on import VAT on goods entering the Freeport, as well as simplified import procedures being available for businesses.

How can Bishop Fleming help?

If you are looking to relocate your business to a Freeport, or wish to find out more about how your existing business indeed might be able to benefit from the above, we would be delighted to help.   

We can also offer detailed advice on the tax reliefs available, giving you as much information as possible to enable you to make informed choices about the next steps for your business.  Please get in touch here.

 

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