Freeports

Freeports are a key part of the Government’s economic plans to create jobs, increase international trade, contribute to the regional levelling up agenda and serve as hubs for innovation.

Areas given Freeport status benefit from tax reliefs, simplified customs procedures, streamlined planning processes to boost redevelopment and government support to promote regeneration and innovation.

The tax reliefs also apply equally in Investment Zones that have designated tax sites.

Freeports represent a fantastic opportunity for companies across every sector and region of the UK. We believe the benefits of Freeports are relevant to all businesses, not just those with import/export operations.

• What are Freeports?
• How do UK Freeports work?
• Freeports locations
• Latest news on UK Freeports - Freeport locations and tax incentives announced
• Tax reliefs, Customs incentives and government support

What are Freeports?

Freeports operate as secure customs zones, usually located at ports or airports, where business can be carried out inside a country’s land border, but where different customs rules apply.

Countries around the world had adapted this basic model by adding different elements to create their own bespoke Freeports based on the Special Economic Zone (SEZ) concept. Each combines a mixture of customs flexibilities, to provide relief from duties, import taxes and administrative burdens; tax measures to incentivise private investment; regulatory flexibilities; and investment in infrastructure, all concentrated in the geographical area around the Freeport.

The UK Government has a bespoke Freeport model which aims to achieve three objectives:

• To establish Freeports as national hubs for global trade and investment across the UK
• To promote regeneration and job creation
• To create hotbeds for innovation

How do UK Freeports work?

The UK Freeport model has a primary customs site designated in or near a seaport, airport or rail port within which the customs benefits will apply. Additional Freeport subzones enable multiple sites to benefit from the Freeports customs model.

Freeports also include a defined site within which Freeport tax reliefs apply – operating in a similar way to existing Enterprise Zones. The purposes of the reliefs will be to incentivise business investment in capital assets and employment. However, clear eligibility criteria apply to prevent tax evasion and avoidance.

Freeport locations

Freeport locations are in:

England

• East Midlands Freeport
• Freeport East
• Humber Freeport
• Liverpool City Region Freeport
• Plymouth and South Devon Freeport
• Solent Freeport
• Teesside Freeport
• Thames Freeport

Scotland

• Forth Green Freeport
• Inverness and Cromarty Firth Green Freeport

Wales

• Anglesey Freeport
• Celtic Freeport

Latest news on UK Freeports

Freeport tax relief extension

Freeport tax reliefs have been formally extended to 30 September 2031 in England (and 30 September 2034 for Scotland and Wales). These measures, combined with a £150 million Investment Opportunity Fund supporting Investment Zones and Freeports, should help provide additional certainty for investment in businesses operating in these areas and the associated maritime and transport sector more generally.

In April 2024 the Government announced they intend to bring forward changes to mandate employer’s provide employee’s workplace postcodes to HMRC.

Tax reliefs, Customs incentives and government support

Freeport areas do not have uniform rules for the entire area, but contain tax sites, customs sites and joint tax and customs sites. It is only in these sites that companies can benefit from the tax reliefs and Customs reliefs for operators within the Freeports.

We have set out below the details of the various Duty and VAT, corporate tax, employment taxes and stamp duty reliefs available to companies established in these specific sites within the Freeport zones.

Stamp Duty Land Tax (SDLT) Relief

There is total relief from SDLT on land purchases within Freeport tax sites in England (and similar relief in Scotland and Wales) where property is to be used for qualifying commercial activity.

Read a full explanation of the Freeport SDLT reliefs and how they work.

Enhanced Capital Allowances (ECA) and Structures and Buildings Allowance (SBA)

The ECA available in Freeport tax sites provides enhanced tax relief for companies investing in qualifying new plant and machinery assets.

An Enhanced SBA rate is available, providing enhanced tax relief for firms constructing or renovating structures and buildings for non-residential use within Freeport tax sites.

Read a full explanation of the Freeport Enhanced CA and SBA and how they work.

Employment tax incentives and NICs rate relief

Employers operating in a Freeport tax site pay 0% employer NICs on the salaries of any new employee working in the Freeport tax site. This 0% rate would be applicable for up to three years per employee on earnings up to a £25,000 per annum threshold. An employee will be deemed to be working in the Freeport tax site if they spend 60% or more of their working hours in that tax site.

Business Rates Relief

There is up to 100% relief from business rates on certain business premises within Freeport tax sites. This relief applies for 5 years from the point at which the relief is first received. The point at which a business first receives relief must be by 30 September 2026. It is intended that newly formed businesses and businesses relocating to a Freeport will be eligible for the relief.

Local Retention of Business Rates - It is intended that the council or councils in which the Freeport tax sites are located will retain the business rates growth for that area above an agreed baseline, following the example of Enterprise Zones. This will be guaranteed for 25 years, giving councils the certainty they need to borrow to invest in regeneration and infrastructure that will support further growth.

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Freeports and Customs

Businesses operating within Freeport customs sites receive tariff benefits, including duty deferral while the goods remain on site, and duty inversion if the finished goods exiting the Freeport attract a lower tariff than their component parts.

Find out more about the Customs and VAT benefits of Freeports.

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Declarations

Declaration requirements are simplified to reduce the administrative burden of moving goods into a Freeport. A reduced amount of data is provided using existing processes (form C21) to allow goods to be cleared to leave a port and businesses would need to complete a declaration into their own commercial records recording information about the goods that will be brought into the UK. They would also need to provide adequate information to the Freeport operator’s records management system so that a central record of all goods in the site can be maintained.

When businesses wish to remove goods from the site, they need to complete normal import declarations if releasing the goods for sale on the domestic market or export declarations if exporting the goods for sale overseas. It will be possible for goods to be declared to another customs procedure, such as transit, on leaving the Freeport site.

Businesses bringing goods into the UK via a UK port also need to submit Entry Summary Declarations for safety and security purposes before arrival and submit manifest information to notify the customs authority that the goods have arrived at the port. These processes for goods entering a port will not differ in respect of Freeports.

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