Each Freeport has up to 3 ‘tax sites’, on which they aim to encourage investment and appropriate development. These sites are the economic engine of the Freeport and sit within a wider ‘outer boundary’ which shows the (much larger) area that is expected to benefit most from the Freeport. For example, jobs created on the Freeport sites may be taken by people living within the ‘outer boundary’.
A Freeport tax site is a connected area of between 20 and 200 hectares, with the three tax sites having a maximum total area of no more than 600 hectares.
Where there are multiple plots of land within a single tax site, the designated Freeport had to demonstrate a clear economic interconnection between these plots.
Tax sites are characterised as under-developed sites where Freeport designation can generate additional productivity from land that is vacant or derelict. Existing buildings can be part of a tax site. However, only new investment / development completed and occupied between 2021 and 2026 is eligible for Freeport economic benefits.
In the 2023 Autumn Statement, Government confirmed Freeport reliefs for tax sites were applicable for new investment / development completed and occupied by 2031, subject to agreement between each English Freeport and Government.
Custom sites can either be located within tax site boundaries or in separate sites within the wider area defined by the Freeport outer boundary. Within custom sites authorised businesses benefit from simplified customs arrangements.
Yes, the Finance Act 2021 defined the terms “Freeport” and “freeport tax sites” under sections 113(5) and 113(3) of the legislation.
The “Designation of Freeport Tax Site Regulations” were made in 2022, with each Freeport having a Statutory Instrument for designation. This covers economic regulations for income tax, corporation tax and stamp duty land tax. The Statutory Instrument for each Freeport includes a map showing the outer boundary and each tax site red line boundary where Freeport economic regulations apply.
Example: East Midlands Freeport designation
All the usual planning and environmental legislation and regulations apply to tax sites, custom sites, ports, and the wider area in the outer boundary for all English Freeports.
Planning:
When a developer wishes to submit a planning application within a Freeport tax site this must be done in accordance with the Town and Country Planning Act.
There may be instances where a developer has proposed a major infrastructure or commercial project for a Freeport tax site which is defined as a Nationally Significant Infrastructure Project (NSIP). The developer will submit a Development Consent Order application in accordance with the Planning Act 2008.
In some cases, planning permission may not be required due to development being permitted under the General Permitted Development Order (2015). These are known as Permitted Development Rights and were amended for ports in April 2021 as set out in ‘Amendments to Class B of Part 8 of Schedule 2’ (The Town and Country Planning (General Permitted Development etc) (England) (Amendment) Order 2021).
Permitted development rights allow for development in connection with the provision of services and facilities at the port, including the erection or alteration of an operational building. Consultation is required with the local authority unless the development is below 4m in height and under 200 cubic metres capacity; or where it is urgently required for the running of the port.
Local authorities in Freeport areas have an important role to play in delivery of development on tax sites. Local Authorities are:
- The consenting authority for all planning applications submitted under the Town and Country Planning Act; and
- A statutory consultee for Development Consent Order applications submitted under the Planning Act 2008.
Local Authorities can also support certainty in planning decision making by allocating tax sites as employment land within Local Plans. In some cases, local authorities have prepared Local Development Orders for Freeport tax sites to permit certain types of development. Local Development Orders are flexible and local determined tools that local authorities can use to help accelerate the delivery of appropriate development in the right places.
Environment:
Seven of the eight English Freeports are located on estuaries. Because of their dynamic nature and huge importance to wildlife and the environment they are heavily regulated areas. There are national and international nature and wildlife designations all classed as protected sites.
- SSSI are covered by the Wildlife and Countryside Act (1981)
- European Sites: SPA, SAC, Ramsar by the Habitats Regulations (1994)
- Most recently by the Environment Act (2021)
Local planning authorities can have several different roles within Freeports:
1. As the local planning authorities, local authorities perform a statutory function as a planning authority and are required to determine planning applications for Freeport tax sites which are submitted by applicants under Town and Country Planning Act Regulations. Where applicants submit Development Consent Order applications for Nationally Significant Infrastructure Projects, local planning authorities have a key role to play as a statutory consultee representing their communities.
2. Local authorities within Freeport areas are also members of the Freeport Board which is a public-private partnership set up to have oversight of the Freeport in their area.
3. One of the local authorities within the Freeport area is also empowered as the 'Accountable Body', with oversight of the management of all public funds for the Freeport and the good, transparent functioning of the governing body (the Freeport Board).