The first three freeports in England have been launched after receiving final Government approval this month – a year later than first expected.
The freeports at Teesside, Plymouth and South Devon, and Solent will each now be able to receive up to £25 million in seed capital funding from the Government, as well as “potentially tens of millions of pounds” in locally retained business rates.
Freeports will be fully operational in the UK for the first time in decades after the sites received final Government approval.
Eight freeports were announced in the March 2021 Budget, benefiting from tax reliefs and simplified customs procedures. They were originally intended to begin operations from late 2021.
What are freeports?
- They are areas where the normal tax and tariff rules of the country in which they are based do not apply
- They allow goods to be imported, manufactured and re-exported without being subject to checks, paperwork, or import taxes, known as tariffs
- This means raw materials can be imported, and then engineered into whole products for export
- Typically, companies operating in the zone pay lower taxes, such as reduced VAT and lower rates of employment tax
Other freeports waiting for Government sign-off before becoming fully operational include East Midlands Airport, Felixstowe and Harwich, Humber region, Liverpool City Region and Thames.
Marco Forgione, Director General of the Institute of Export & International Trade (IOE&IT) said it was great news for UK trade that freeports are now getting off the ground.
He said: “The IOE&IT has backed this initiative from the start, and we have worked closely with the freeports. For instance, we supported the launch of the Centre for Digital Trade and Innovation in Teesside Freeport. This is just a start though, particularly with further sites to be announced in Scotland and Wales.”
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