Investment Zones

The measure

The government has announced that it will work with 38 local authorities to introduce Investment Zones across the UK, with the stated aim of driving growth and unlocking housing. Areas with Investment Zones will benefit from tax incentives, planning liberalisation, and wider support for the local economy.

The government is considering a number of tax incentives, which will be time-limited. These include:

• 100% relief from business rates on newly occupied business premises;
• 100% first year allowances for companies’ qualifying expenditure on plant and machinery for use in tax sites;
• Enhanced Structures and Buildings Allowances of 20% per annum on the cost of eligible non-residential buildings;
• Zero-rate Employer NICs on salaries of any new employee working in the tax site for at least 60% of their time, on earnings up to £50,270 per year; and
• Full Stamp Duty Land Tax relief for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for new residential development.  

The Department for Levelling Up, Housing and Communities will shortly set out more detail on the planning offer. This will include detail on the level of deregulation and the streamlined mechanism for securing planning permission. 

Who will be affected?

The tax reliefs are aimed at businesses locating and developing in the designated areas, and the local economies of the Investment Zones.

When will the measure come into effect?

Investment Zones will only be chosen following a rapid Expression of Interest process open to everyone, and after local consent is confirmed. The government is in early discussions with 38 Mayoral Combined Authorities and Upper Tier Local Authorities who have already expressed an initial interest in having a clearly designated, specific site within their locality.