In a report, the Sunday Telegraph said, Rishi Sunak, Britain’s finance minister is preparing to introduce sweeping tax cuts as well as overhaul planning laws in up to 10 new “freeports” within a span of 1 year following Britain’s leaving the EU in December 2020.
Sunak plans on opening the bidding for towns, cities and regions to become freeports, which would place them outside UK customs territory during his autumn budget later this year, said the report citing a copy of the plans it said it had seen.
Sunak plans on confirming the successful bids by next spring and introduce major tax and regulatory changes in those areas during next year’s budget, said Telegraph.
The tax overhaul will include research and development tax credits, cuts to stamp duty house-purchase tax, generous capital allowances, competitive business rates, and local relaxations of planning laws.
Successful bidders designated as freeports will, ultimately, be legally outside UK customs union, with goods imported, manufactured or re-exported without incurring national tariffs or import VAT until they enter the rest of the economy.
Through this vehicle, the British government believes it can “transform ports into international hubs for manufacturing and innovation, with the economic and regulatory incentives designed to encourage firms to establish new factories and processing sites in the areas”, said a source.
Backing up these measures will be a second wave wherein, import VAT and national insurance contributions and customs duties would be cut from April 2022, said the report.
The freeports are to be fully operational within 18 months of Britain’s leaving EU’s single market bloc.