Freeports: tax breaks

As part of Budget 2021, the Chancellor announced the introduction of “Freeport” status for a number of areas across England, including the Liverpool City Region, providing a range of tax benefits to businesses investing in the area.

The key tax benefits can be summarised as follows:

  • Qualifying land transactions will be exempt from SDLT. A transaction will qualify where it takes place on or before 30 September 2026, relating to land within the Freeport area used exclusively for a qualifying purpose (including a commercial trade or profession, but not for residential purposes).
  • Enhanced structures and buildings allowances provide a straight-line 10% deduction per annum, over ten years, for the cost of constructing or renovating structures and buildings for non-residential use within a Freeport area, incurred on or before 30 September 2026.
  • Enhanced capital allowances provide a 100% first-year allowance for the cost of new plant and equipment for use within a Freeport area, incurred on or before 30 September 2026. These allowances should be available more widely than the 130% ‘superdeduction’, including being available for a longer period and to businesses not operating as limited companies.
  • A 0% rate of employer National Insurance Contributions (NICs) will apply on the salaries of new employees working within a Freeport area, on earnings of up to £25,000 per annum, for up to three years, per employee. This relief is intended to be available for nine years from 1 April 2022, but for an initial minimum period up to 31 March 2026, with a review at this point to confirm its continued availability.
  • 100% relief on business rates for certain business premises, for new businesses in, or those relocating to, a Freeport area, between 1 October 2021 and 30 September 2026. Relief should be available for five years, from the date at which the beneficiary first receives relief.