In an attempt to boost the economy once the UK completes its exit from the EU, the government has today announced that it has opened the bidding process for seven new freeports to be established around the UK in 2021, with more to follow. A freeport is a designated zone where the normal tax and duty tariff rules do not apply and are typically seaports and airports.
Businesses can import goods into a freeport without paying VAT, excise and duty and can then manufacture or process and re-export goods without being liable to pay tax. Sales to the UK consumer market become liable to tax at the point of sale. Freeports also offer simplified Customs procedures and as such are an attractive option for cross-border trade.
As well as benefiting businesses which import goods into the UK, a freeport will also offer wider tax reliefs for land purchases and redevelopment, construction and renovation of buildings, investment in new plant and machinery as well as potentially lowering employer NIC charges. No further details are currently available but the proposals appear similar to those currently available for areas designated within the UK as Enterprise Zones.
Please see the government’s latest update