Freeports, are they right for you?

There could be many upcoming opportunities for manufacturers and transport & logistics businesses, as the UK’s new freeports begin to open up. Relocating to these special economic zones can be beneficial, but how can businesses make sure they can take advantage when the time comes?

Two freeports are now early into their operations at both the Teesside and Thames locations, with the Freeport East in Suffolk soon to follow. Many businesses are considering moving or relocating into these zones to take advantage of the incentives and benefits they provide. For example, a business operating from a designated freeport zone could benefit from:

  • Simplified customs procedures
  • Tax reliefs
  • Streamlined planning processes
  • Innovation and regeneration support from the government

There are a further five freeport locations planned for England with others expected to open around the UK (Scotland has announced two green freeports). These nominated sites could bring manufacturers and transport & logistics companies significant commercial rewards.

What is the freeport focus?

It will be important to consider the focus for each of the different freeports and the particular trade corridors that they each have with other countries. These may or may not be in tune with your activities, and your plans should be discussed with the freeport owner to seek some provisional agreement about operating from the port. For example, Thames Freeport connects Ford’s Dagenham engine plant with global ports at London Gateway and Tilbury and goods are largely automotive or other related mechanical componentry. Teesside Freeport, which incorporates three onsite port facilities, has strong links with the on and offshore wind turbine manufacturing industry. Freeport East, which includes Harwich International and the Port of Felixstowe, is home to the planned East Hydrogen Hub, which will lead on a number of innovative nuclear, hydrogen, maritime and transport decarbonisation schemes.

Consider the customs benefits?

Any businesses operating inside the designated areas of their chosen freeport are able to apply to use a Single Authorisation, a simplified customs procedure that allows the importation of goods without paying tariffs, subject to certain conditions. Once this authorisation is secured, it can apply to goods imported for a range of different purposes such as temporary admission, customs warehousing and inward processing.


Manufacturers at the freeport can then use these imported goods to make or assemble products, before exporting them again tariff-free, although it is important to bear in mind that a tariff might be payable on the finished product when it reaches its ultimate destination.

Locating at a freeport could result in significant cost savings and if there are key customers that are also based there, this could bring further efficiencies for both freight forwarders and other logistics businesses

How can businesses prepare?

There are a number of issues for businesses to work through when considering using a freeport, for example:

Assess freeport suitability

Carrying out a careful assessment is important, in order to consider whether relocating to a specific freeport is going to be beneficial or not. The key considerations should include whether any existing customers are already present and whether established trade corridors could be utilised. For any businesses that have strong sustainability credentials or are planning to invest in innovation, relocating to a freeport could also ensure they are eligible for Government-backed incentives.

HMRC registrations

Any businesses wishing to relocate to a freeport should register their interest with HMRC. Prior to doing this, they should also make contact with the freeport owner and seek some provisional agreement of their plans to operate from the port.

Strengthen your record keeping and adopt stringent procedures

Businesses will need to demonstrate their ability to maintain stringent record keeping procedures, this will be required when seeking Single Authorisation status for customs procedures. They will also need to meet specific safety and security standards. 

Make the most of the tax benefit

Not only are there potential savings linked to streamlined customs procedures and tariff-free imports, there are also additional benefits if the business is located in a tax site of a freeport. For example, the business could benefit from up to 100% relief from business rates on certain premises as well as reduced national insurance Contributions (NICs) liabilities. There are also SDLT exemptions and enhanced Structural Buildings Allowances available when acquiring qualifying land and property, as well as enhanced capital allowances when investing in qualifying new plant and machinery.

Optimise investment in innovation

If when looking to facilitate operations inside a freeport, the business plans to invest in new software or processes, advice should be taken about whether this investment might qualify for R&D tax relief. In addition, by facilitating data sharing between organisations along with a proposed dedicated portal for submitting customs declarations, licences and other documentation, operations can also be streamlined.

Do you have more questions about Freeports? Get in touch with Sean Turner below:

Sean Turner

Sean Turner

Senior VAT Manager

Posted in Blog, Manufacturing, Transport & logistics