The Government aims to create up to 10 freeports in locations across the UK but is first asking for comments on a document entitled Freeports Consultation: Boosting Trade, Jobs and Investment Across the UK.
This can be found at assets.publishing.service.gov.uk, with a deadline for responding of 20 April 2020.
Explaining the rationale behind freeports, the Department for International Trade (DIT) says: “These will be innovative hubs which boost global trade, attract inward investment and increase prosperity in the surrounding area by generating employment opportunities in some of our most deprived communities around the UK.”
Promoted as innovative hubs that boost global trade, attract inward investment and increase productivity, the freeports will have different customs rules than the rest of the country.
The Government highlights that it has drawn on evidence from successful freeports around the world to develop a UK freeport model.
This includes tariff flexibility, customs facilitations and tax measures. Planning reforms are also being considered as is additional targeted funding for infrastructure improvements and measures to incentivise innovation.
The devolved administrations will be encouraged to develop proposals to allow freeports to be created in Scotland, Wales and Northern Ireland, in addition to those in England.
The key customs and tariff benefits to be offered to businesses bringing goods into a freeport site are:
Duty suspension: No tariffs, import VAT or excise to be paid on goods brought into a Freeport from overseas until they leave the Freeport and enter the UK’s domestic market;
Duty inversion: If the duty on a finished product is lower than that on the component parts, a company could benefit by importing components duty free, manufacture the final product in the Freeport, and then pay the duty at the rate of the finished product when it enters the UK’s domestic market;
Duty exemption for re-exports: A company could import components duty free, manufacture the final product in the Freeport, and then pay no tariffs on the components when the final product is re-exported; and
Simplified customs procedures: The Government intends to introduce streamlined procedures to enable businesses to access Freeports.
Last reviewed 10 February 2020