Businesses operating within eight new freeport sites can benefit from an enhanced capital allowance of 100% for expenditure on qualifying plant and machinery and special rate assets (instead of the ordinary 18% and 6% annual rates, respectively), as well as an enhanced Structures and Buildings Allowance of 10% for expenditure on qualifying structures and buildings (increased from the ordinary 3% annual rate)
Businesses operating within the eight new freeport sites (East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool, City Region, Plymouth and South Devon, Solent, Teesside and Thames) that incur capital expenditure on plant and machinery and non-residential structures and buildings.
The measure will come into effect in relation to qualifying expenditure incurred on or after the date on which the Freeport site is designated. For enhanced Structures and Buildings Allowances, the measure will come into effect in relation to qualifying expenditure incurred under contracts entered into on or after the date on which the Freeport site is designated. The measure will expire on 30 September 2026.
For businesses operating or considering investment within designated areas, this measure provides a significant acceleration of the tax relief already available for capital investment. Alongside other generous enhancements to the capital allowances regime announced in Budget 2021, this measure provides a powerful additional incentive for businesses to invest in these designated areas in the short to medium term.