Designation of Freeport tax sites
Published 3 March 2021
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Who is likely to be affected
Freeport bidding coalitions that are awarded Freeport status by the government or the Freeport Governance Body of a Freeport.
General description of the measure
This measure will introduce a power to designate the location of one or more tax sites within any Freeport located in Great Britain from 9 March 2021. Legislation to give effect to this will be introduced within the Finance Bill 2021.
Policy objective
This power will enable tax sites within Freeport locations to be designated and recognised in law as geographical areas where businesses can benefit from tax reliefs to incentivise investment and to boost employment.
Background to the measure
On 10 February 2020 the government published a consultation on Freeport policy, in respect of its plans to introduce at least 10 Freeports in the United Kingdom following its departure from the European Union.
Freeports are intended to support the policy of levelling up the towns, cities and regions of the United Kingdom.
The government published a consultation response on 7 October 2020, which provided initial confirmation of the tax reliefs it intended to offer to encourage investment in Freeports.
This was followed by a Freeport bidding prospectus on 16 November 2020, which included plans for the introduction of the tax reliefs to be offered.
Detailed proposal
Operative date
The measure will come into effect from 9 March 2021.
Current law
The measure will introduce new legislation in Finance Bill 2021 to designate tax sites within Freeport locations in Great Britain.
Proposed revisions
This power will enable HM Treasury to designate through secondary legislation, tax sites within a Freeport area in Great Britain.
Tax sites will be designated for the purpose of claiming Freeport specific tax reliefs.
Summary of impacts
Exchequer impact
| 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 |
|---|---|---|---|---|---|
| Empty | Empty | Empty | Empty | Empty | Empty |
The final costing will be subject to scrutiny by the Office for Budget Responsibility and will be set out at the next fiscal event.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure will enable tax sites in Freeport locations in Great Britain to be designated and recognised in law as geographical areas where businesses can benefit from Freeport specific tax reliefs.
This measure itself has no direct impacts on individuals. Any future impacts arising from Freeports will be fully examined and detailed. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts for those in groups sharing protected characteristics. The measure applies only to Great Britain, so there will be no Northern Ireland impacts.
Impact on business including civil society organisations
This measure will enable tax sites within Freeport locations to be designated and recognised in law as geographical areas where businesses can benefit from Freeport specific tax reliefs.
The measure itself has no direct impacts on businesses or civil society organisations. Any future impacts arising from Freeports will be fully examined and detailed.
Operational impact (£m) (HMRC or other)
This change can be made at no cost to HMRC. Any operational costs of the individual tax measures will be accounted for in their separate tax information and impact notes.
Other impacts
Other impacts have been considered and none has been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax returns and through communications with the affected taxpayer population.
Freeports governance bodies will also need to monitor and evaluate business activity in each Freeport.
Further advice
If you have any questions about this change, please contact John Rodgers on Telephone: 03000 514188 or email: john.p.rodgers@hmrc.gov.uk.