Freeports to go ahead in 2021

The government is to go ahead with plans to create new Freeports across the UK, offering simplified customs arrangements and a package of tax reliefs for business, in order to boost post-Brexit trade

The Treasury said a consultation on the concept, which took place between February and July this year, received 364 responses with the majority in favour of the approach.

However, some respondents, including several non-government organisations and individuals, expressed views about potential negative impacts on areas including port security, safety, workers’ rights and the environment.

Some respondents also expressed views around economic displacement – particularly in deprived areas – and the risk of Freeports being used for tax evasion or money laundering.

The Treasury said the consultation process had been undertaken to ensure that Freeports are effective, value-for-money and minimise any risks.

The government has now confirmed that sea, air and rail ports in England will be invited to bid for Freeport status before the end of the year, with the government aiming for the first of the new sites to be open for business in 2021.

Designed to attract major domestic and international investment, these will allow places to carry out business inside a country’s land border but where different customs rules apply.

A company can import goods into a Freeport without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs.

Freeports will benefit from a streamlined planning processes to aid brownfield redevelopment; a package of tax reliefs to help drive jobs, growth and innovation; and a simplified customs procedures and duty suspensions on goods.

Rishi Sunak, Chancellor of the Exchequer, said: ‘Our new Freeports will create national hubs for trade, innovation and commerce, regenerating communities across the UK and supporting jobs.

‘They will attract investment from around the world as we embrace new opportunities following our departure from the EU and will be a key driver for economic recovery as we build back better post coronavirus.’

The government said Freeports will be selected through a fair, transparent and competitive process, and will be expected to collaborate closely with key partners across the public and private sectors.

The bidding process for locations to become a Freeport in England will open by the end of 2020, and the government is also working with the devolved administrations to seek to establish at least one Freeport in each nation of the UK.

Useful links:

Freeports consultation and outcome

How freeports would work: consultation on plans for 10 freeports

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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