The Spring 2023 Budget introduced us to the four pillars of the government’s industrial strategy: enterprise, employment, education and everywhere.
As part of the overall ‘levelling up’ agenda, and one of the foundations for the ‘everywhere’ pillar, 12 new Investment Zones will be established. Once designated, each zone will benefit from a package of tax reliefs including enhanced capital allowances for plant and machinery, enhanced structures and buildings allowances, Stamp Duty Land Tax (SDLT) relief and relief for secondary Class 1 National Insurance contributions, together worth £80m each over five years.
For the chosen sites in England, (and following proposals announced in the mini-Budget 2022, areas across the Midlands, Greater Manchester, the North-East, Yorkshire, Teesside and Liverpool have all been identified as having the potential to host a ‘new Canary Wharf’) full SDLT relief will be available for purchases of land and buildings used for commercial purposes.
Enhanced capital allowances of 100% will be made available for companies incurring qualifying expenditure on new plant and machinery for use in an Investment Zone and an enhanced rate of structures and buildings allowances of 10%/annum for 10 years will be made available for qualifying expenditure on non-residential structures and buildings in the special tax sites.
For those businesses with physical premises in an Investment Zone and new employees spending 60% or more of their working time within the special tax site, secondary Class 1 NICs relief will also be available, limited to earnings of £25,000 per employee for up to three years.
If your business is considering expanding or relocating, then an Investment Zone could be worth considering.