Boost to Solent with announcement of Freeport
In his 2021 budget, the Chancellor Rishi Sunak announced the launch of eight new freeports throughout England with the Solent identified as one of these.
Freeports are located around a shipping port (or airport). Any goods that arrive in to the freeport from overseas are exempt from tax charges (called tariffs). These taxes are then only paid if the goods leave the freeport and moved elsewhere within the UK otherwise they are sent abroad without charges being due.
We have seen freeports in the past so why are these being re-introduced?
It is hoped that the launch of eight freeports will help to regenerate areas as businesses inside the sites will be offered temporary tax breaks. These reductions will include a decrease in the tax companies pay on their existing property and any new buildings purchased. Employers in these regions will also be able to pay less national insurance for all new workers from April 2022.
One of the main positive aspects of a freeports is that they can help increase manufacturing and encourage investment into the Solent area which in turn will boost employment.
Due to Brexit greater flexibility around these freeports will be allowed as there will be no need to obtain agreement from the EU. However, the Brexit deal agreed still requires subsidies to be justified.
Southampton is very well placed to make the most of the opportunities available from the Solent freeport. The Solent Local Enterprise Partnership (LEP) which submitted the application for Southampton to become a freeport estimated that more than £2billion could be invested in the region. They are also hoping that 52,000 jobs could also be created.
Sean Daniel, Managing Director said “the announcement of a freeport in the Solent area is very welcomed. The investment and creation of jobs will be a great boost after the impact of Covid.”
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