The Chancellor recently announced in his budget that Plymouth is to be granted Freeport status in what is perceived to help level up the city with other parts of the country.
Whilst there appears to be nothing finalised what can we expect from this status?
Whilst some Freeports will commence later this year, the commentary from the local authority would indicate the Plymouth Freeport status is not likely to commence until the start of 2022. One of the key strands to this is the creation of Freezones which is likely to include South Yard, Langage Energy Zone and Sherford Business Park.
One of the key elements of the Freeport concept is that it will create a new customs model where firms can import goods into a Freeport without paying tariffs, process them into a final good and then either pay a tariff on the goods sold into the domestic market, or export the goods without paying UK tariffs.
In addition, the Freeport areas will also benefit from significant tax incentives which are likely to include:
Stamp Duty Land Tax exemptions on buying property within a Freeport
Enhanced Capital Allowances for companies investing in qualifying new plant and machinery assets.
Relief on Employer National Insurance – This will enable employers in a Freeport to pay 0% employers’ national insurance on the salaries of any employees working in a freeport site. This 0% rate would be applicable for up to 3 years per employee on earnings up to £25,000 per annum.
The government also intends to offer 100% relief from business rates on certain businesses within Freeport tax site.
Whilst there are clearly matters that will develop over time there could be potential benefits both to our area and those businesses that can take advantage of the Freeport sites.