Freeports are geographic areas which have some tax and customs rules set aside.
Imports can enter “customs zones” free of tariffs, the tariff being deferred until the product leaves the zone with a consequent cash flow advantage for manufacturers.
Tariffs can be avoided entirely where a product is received into a customs zone and the manufactured goods are then shipped outside the UK.
Areas within the freeports can be designated “tax zones” and businesses within these can benefit from stamp duty and other buildings and land reliefs, employer national insurance contributions relief, business rate relief, and enhanced capital allowances.
How these systems will work in practice is yet to be ironed out, prompting the ICAEW to call for greater clarity https://www.icaew.com/insights/viewpoints-on-the-news/2021/sep-2021/freeports-business-needs-greater-clarity
Liverpool City Region Freeport management board has recently appointed a chair designate in Thomas O’Brien, originally from Liverpool but latterly working for the World Bank in the US. It is hoped this appointment, and the board’s formal establishment in the coming months, will help extract some further detail from Government.
The next step
For more information, get in touch with John Mosford at j.mosford@uhy-uk.com or via 0161 236 6936. Alternatively, please get in touch with your usual UHY adviser.
