You may have heard in the news about the creation of Freeports by the government. Where are they and what is their purpose?
Where?
Subject to finalisation of the authorisation processes, Freeports have been created in the following areas:
- East Midlands Airport
- Felixstowe & Harwich including the Port of Felixstowe and Harwich International Port
- Humber including parts of Port of Immingham
- Liverpool City Region including the Port of Liverpool
- Plymouth & South Devon including the Port of Plymouth
- Solent including the ports of Southampton, Portsmouth and Portsmouth International Port
- Thames including the ports at London Gateway and Tilbury
- Teesside including Teesside International Airport, the Port of Middlesbrough and the Port of Hartlepool.
Why?
One of the Government’s aims of creating the Freeports is to generate employment opportunities across the UK by creating innovative hubs, attracting inward investment, increasing productivity and generally giving a financial boost to areas where it is most needed.
There are a number of potential tax reliefs available including Business Rates, Stamp Duty Land Tax and Enhanced Capital allowances.
As an incentive to hire new employees, employers with a business premises within a Freeport tax site will be able to apply a zero rate of secondary Class 1 National Insurance contributions to the earnings of new employees who spend 60% or more of their working time within the site. This will represent a saving of 15.05% (effective rate for 2022/23) on the wage costs for a business.
The relief will be available for all new hires earning up to £25,000 per annum from 6 April 2022 until 5 April 2026 for a 36-month period, with the possibility of an extension of the relief for up to a further five years.
Guidance will be available in due course from HMRC for employers to self-assess eligibility to claim this relief. Please visit the GOV.UK website for more detailed information about the Freeports and the opportunities available.
