Freeport East is one of eight new English Freeports announced by the Chancellor of the Exchequer in March.
The project proposes to designate together the ports of Felixstowe and Harwich International as a Freeport, offering simplified documentation and no tariffs for imports arriving from abroad, amongst a number of other benefits for manufacturers, logistics operators and supply chains.
A freeport is a secure, special tax zone that is exempt from import taxes for items coming into the area which are not destined for the UK – The freeport area essentially exists as if it is not part of the country for import tax purposes. However, goods that are to be transported into other parts of Britain will still have to go through the full import procedure.
Similar to duty-free at the airport, imports into Freeport East will be exempt from import duties whilst they remain in the zone.
Freeports could draw manufacturers to the area as they would not have to pay taxes on materials they import before they export the finished products elsewhere. This incentive to manufacture within the area will in turn bring jobs and economic activity to the region.
Freeport East has been referred to as “A Global Freeport for a Global Britain” and it is expected to bring exciting improvements to the UK’s logistics industry, the economy and the nation as a whole.
East Anglia is already home to two of the largest container ports in the UK, Felixstowe and Harwich, which together account for 60% of all of the UK’s trade with Asia.
On top of this, Freeport East is anticipated to generate an additional £500 million of investment into the local economy over five years, 13,500 regional jobs and a £5.5 billion economic boost within 10 years.
Freeport East will be uniquely positioned to create global trade links with countries across the world.
This is expected to draw international attention and investment to the area, developing new trading relationships for a Global Britain.
The East’s growing energy sector played a key role in Freeport’s bid, with the industry’s growth expected to bring a host of benefits to the region. The proposed Freeport East Hydrogen Hub is expected to be one of the world’s most exciting and innovative nuclear, hydrogen, maritime and transport decarbonisation schemes.
Tax incentives will be available for a range of businesses to encourage inward investment and regional economic growth, including:
• Enhanced Structures and Building Allowances
• Enhanced capital allowance of 100%
• Full relief from Stamp Duty Land Tax
• Full Business Rates relief
• Employer National Insurance Contributions relief
Tariff benefits such as duty deferral while goods remain onsite will be available to businesses operating within the Freeport East customs site. A full list of customs benefits include:
• Simplified declaration procedures for goods entering a Freeport
• Non-controlled goods will be declared via entry in commercial records
• Import or export declarations will be required for goods leaving a Freeport
• Excise duties, duty and import VAT will be suspended when the goods enter a Freeport and payable when they leave
• Goods can be bought and sold in a Freeport provided both parties have the same customs authorisation
Freeport East is expected to create an estimated 13,500 highly skilled jobs for the region, offering opportunities in emerging and expanding industries such as specialised production and manufacturing, research and development, and energy.
Freeport East Felixstowe has received planning consent and a planning application has been submitted for Freeport East Gateway 14. Following the formal designation of the Freeport, development is expected to be ready to begin immediately.
Developments at Freeport East Harwich are expected to begin onsite in 2023, with the necessary applications to be submitted shortly.
More recently, a study has been launched into how Freeport East could potentially become a net-zero port and a net-zero energy hub for third parties and adjacent regions has been selected as one of the beneficiaries of the Department for Transport’s Clean Maritime Demonstration Competition.
Transmode operates from a number of UK sites including Felixstowe, which is the country’s busiest container port and deals with 40% of Britain’s containerised trade.
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