Measure
The government has announced that they are extending the Investment Zones and Freeport programmes from five to ten years.
In addition to the existing Investments Zones in Liverpool, West Yorkshire and South Yorkshire; three further Investment Zones in Greater Manchester, the West Midlands, the East Midlands were designated and a new Zone in Wrexham was announced.
Within these zones, companies undertaking eligible activities should benefit from a 100% first-year allowance on expenditure on qualifying plant and machinery assets for use in designated tax sites. This represents an uplift on the 50% first year allowance for special rate expenditure available under the Full Expensing regime. An enhanced Structures and Buildings Allowance of 10% per annum on qualifying expenditure on non-residential structures and buildings will also be available.
Companies incurring qualifying expenditure in a designated tax site within a new or existing Investment Zone or Freeport.
The measures apply to expenditure incurred in the English Freeports up to 30 September 2031, with the applicable windows for the Investment Zones to be designated in due course.
We expect this measure will be welcomed by businesses already investing in the designated tax sites, providing greater certainty and encouraging long-term investment.
For businesses not currently operating in Freeports or Investment Zones, these measures may encourage decision-makers to consider the enhanced reliefs in Freeports and Investment Zones when determining their location strategy.