Freeports: What they are and what benefits they offer

Here’s our quick overview of Freeports, what they are and what benefits they offer.

On 20 November 2023 the Government announced that the window to claim Freeport tax relief in England will be extended to September 2031. This is however conditional on the Freeport developing a satisfactory plan for Levelling Up, Housing and Communities.

Freeports were the subject of a white paper published by Rishi Sunak when he was a backbench MP in 2016. The idea is that customs rules and taxes do not apply to goods until they leave the specified zone. Supporters of the idea of Freeports say they encourage economic activity in the surrounding area and increase manufacturing.

Funding of £25m was provided to Freeport East in order to facilitate the creation of 13,500 new jobs in the ports of Harwich and Felixstowe. 50% of business rates that would have gone to central government can be used by the local authority for training and local development.

Whether or not Freeports benefit the wider economy is open to conjecture, however they do have benefits for any company that choses to operate in the designated Freeport area.

These benefits include:

• Zero rate employer class 1A for new employees
• Enhanced tax allowances for investment
• Exemption from business rates
• Exemption from stamp duty

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Disclaimer - All information in this post was correct at time of writing.