The Government is consulting on plans to create up to ten freeports. Freeports may provide tariff flexibility, customs facilitations and tax measures designed to encourage global trade and attract inward investment post-Brexit. The proposed Freeports will have different customs rules to the rest of the country.
What is a Freeport?
Freeports are secure customs zones located at ports where business can be carried out inside a country’s land border, but where different customs rules apply. The paper says that Freeports may:
- reduce administrative burdens and tariff controls
- provide relief from duties and import taxes
- ease tax and planning regulations
- offer simplifications to normal customs processes on imported goods
- encourage global trade
- provide hotbeds for innovation
- increase prosperity areas surrounding Freeports by generating employment opportunities
- attract inward investment post-Brexit
Typically, goods brought into a Freeport do not attract a requirement to pay duties until they leave the Freeport and enter the domestic market. No duty at all is payable the goods are re-exported. If raw materials are brought into a Freeport from overseas and processed into a final good before entering the domestic market, then duties will be paid on the final good.
Government aims
It is stated that the government wants Freeports to boost trade, jobs and investment. They say that is why they are proposing cutting red tape by streamlining customs processes, exploring the use of planning measures to speed up planning processes and accelerate development and housing delivery in and around Freeports, and consulting on a comprehensive set of tax breaks to support businesses. Of course, all this would be unnecessary if Brexit had not have occurred.
Deadline
The consultation deadline is 20 April 2020 so there is not a lot of time to make your views known.