What is a freeport and what does it mean for Plymouth
Freeport #Freeport
Chancellor of the Exchequer Rishi Sunak has announced that Plymouth’s bid to be one of the Government’s tax-free freeports has been successful – but what is a freeport?
According to the government, freeports are “secure customs zones” that are located at ports where business can be carried out inside a country’s land border, but where different customs rules apply.
Typically, items brought into a freeport do not have a requirement to pay duties until they leave the Freeport and enter the domestic market – and there are no duties on the items at all if the product is re-exported.
Ultimately, freeports support jobs, trade and investment in a particular area and serve as “humming hubs” for high-quality manufacturing, the titans of trans-shipment and warehouses for wealth-creating goods and services, the government says.
One of just eight locations in England selected, the freeport in Plymouth will help create jobs and spark ‘growth and innovation’ across the city and the wider South West region.
The other freeports have been named as the Liverpool City region, the Humber region, East Midlands airport, the port of Felixstowe and Harwich in Essex, Solent, Thames and Teeside.
What is a freeport?
From the UK Government’s Freeport Consultation, February 2020
“Freeports are secure customs zones located at ports where business can be carried out inside a country’s land border, but where different customs rules apply.
“They can reduce administrative burdens and tariffs controls, provide relief from duties and import taxes, and ease tax and planning regulations.
“Typically, goods brought into a Freeport do not attract a requirement to pay duties until they leave the Freeport and enter the domestic market – and no duty at all is payable if they are re-exported.
“If raw materials are brought into a Freeport from overseas and processed into a final good before entering the domestic market, then duties will be paid on the final good.
“Freeports may also offer simplifications to the normal customs administrative processes on imported goods.”
For our full coverage on Rishi Sunak’s Budget 2021, read our article here.
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What does this mean for Plymouth?
Having Plymouth as a Freeport should see the city benefit from import and export tax reliefs, with the aim of creating lots of new jobs for local people, while new businesses and leading companies from elsewhere should want to come to Plymouth and invest in the area.
BusinessLive’s reporter for Plymouth, William Telford explains: “Plymouth and South Devon could benefit with a ‘freezone’ creating space for businesses to import goods and materials, add value to them by manufacture, and export them and leverage the city’s marine innovation strengths to attract marine sector tech companies
The UK government says freeports are “innovative hubs which boost global trade, attract inward investment and increase prosperity in the surrounding area”.
Freeports typically do this by generating employment opportunities in some of the most deprived communities in the UK and also offer extra opportunities for “innovative customs and transport technologies” to be trialled in controlled environments,.
The UK Government has the following objectives for Freeports:
establish Freeports as national hubs for global trade and investment across the UK – enhance trade and investment
promote regeneration and job creation – create high-skilled jobs in ports and the surrounding areas around them
create hotbeds for innovation – form dynamic environments that will attract new businesses, investors and innovations
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Plymouth named as a tax-break freeport during Rishi Sunak’s Budget 2021
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