Update to Investment Zones and Freeports

The measure

The government has reconfirmed the extension of the Freeports and Investment Zones schemes from 5 to 10 years, which was previously announced at the Autumn Statement 2023. This extension will also apply to Scotland and Wales, while details of the Northern Ireland Enhanced Investment Zone are yet to be confirmed.

Moreover, the government has released additional information regarding six Investment Zones in England, including announcing that the eighth zone in England, the Tees Valley Investment Zone, will focus on the digital and creative sectors. Furthermore, a prospectus has been released for the Investment Opportunity Fund set up to encourage investment in these locations within five priority industry sectors (advanced manufacturing, digital and tech, green industries, life sciences, and creative).

The enhanced tax reliefs available in Freeports, and to varying degrees in Investment Zones, include a 100% first-year allowance on the provision of all plant and machinery, and an accelerated 10% rate of structures and buildings allowances (subject to certain exclusions), as well as Stamp Duty Land Tax, business rates and NIC benefits. However, not all of these reliefs will be available for all Investment Zones, as these are subject to the agreement between the relevant local authority and the government as to how the £160m of funding available per Investment Zone is to be deployed. 

Who will be affected?

Companies investing within a designated Freeport or Investment Zone. 

When will the measure come into effect?

The enhanced tax reliefs are broadly available for expenditure incurred for 10 years from designation of each tax site. In particular, the Freeport reliefs will be available until September 2031 in England and September 2034 in Scotland and Wales.