Interested in working within a Freeport operating as a customs site operator?
You’ll find two new guidance notices published to help you achieve exactly that and we can help you understand more of the detail to plan your operation.
On 31st August, HMRC published two guidance pages on GOV.UK to provide further information on operating a customs site inside a Freeport.
Once the customs site operator has registered their interest with HMRC they will be assigned a named contact to support them through the process of applying for the necessary authorisations.
Companies operating in the zone have the benefit of tax relief, such as reduced VAT, for the purchase of land and lower rates of employment tax.
The core customs and tariff benefit proposals:
But critics argue they simply defer the point when import tariffs are paid, which then still need to be paid at some stage.
And Labour has raised concern the ports could be used by counterfeiters and tax dodgers without scrutiny from customs and excise.
Freeports announced for eight new regions are hailed as a brilliant solution for problems with job creation and regeneration plans but there are good sides and not so good sides to consider.
But Tim Morris, chief executive of the UK Major Ports Group, warned: “Freeports alone are not a silver bullet for addressing deprivation in coastal communities.
“The Government should look at extending some of the low-cost, pro-investment measures in the freeports ‘tool box’ to port areas more widely.”
Michael Harris, Financial Crime Consultant at global data and analytics provider LexisNexis® Risk Solutions, warned that while Freeports will provide a welcome boost to local economies, there is a risk of bringing criminal activity via the 'back door'.
He said: "In recent years, there has been numerous examples of vulnerabilities in free trade zones, with trade in high valuable goods being funded by illicit money. It is imperative that lessons are learned from this to ensure that firms taking advantage of the tax breaks and other benefits are held to account. Authorities granting access to firms, need to take a risk-based approach and conduct adequate levels of checks and due diligence on both the company, its beneficial owner and key executives to ensure there are no known financial crime or reputational risks."
Research by the Centre for Cities published in 2019 and looking at enterprise zones and land-based incentive areas like Freeports, concluded that they are unlikely to provide high skill jobs, instead creating low wage jobs in warehousing and could well drain activity from elsewhere in the country rather than creating new activity.
The report said: "These findings should lead to greater caution over the creation of enterprise zones or any other area-based initiative, such as the free ports that have been suggested after the UK leaves the EU.
"Zones offering tax incentives or tariff reductions to relocate are likely to move activity around the locality or in from elsewhere in the country, rather than create a new activity. And they are unlikely to attract in higher-skilled jobs that would change the fortunes of an economy."
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