Twelve new investment zones are to be created in the UK, including one each in Scotland, Wales and Northern Ireland. These will provide tax breaks and other benefits.
The details given include the following:
“3.108 Investment Zones will have access to a single 5 year tax offer matching that in Freeports, consisting of enhanced rates of Capital Allowance, Structures and Buildings Allowance, and relief from Stamp Duty Land Tax, Business Rates and Employer National Insurance Contributions. Alongside this, Investment Zones will have access to flexible grant funding to support skills and incentivise apprenticeships, provide specialist business support and improve local infrastructure, dependent on local requirements. Local partners will be able to choose the number and size of tax sites, within the £80 million envelope, up to a maximum of 3 sites totalling 600 hectares. The amount of grant funding will depend on the number and size of tax sites.”
The following tax reliefs will be offered for five years:
- SDLT: a full SDLT relief for land and buildings bought for commercial use or development for commercial purposes
- Business Rates: 100% relief from business rates on newly occupied business premises, and certain existing businesses where they expand in Investment Zone tax sites.
- Capital Allowances: 100% first year allowance for companies’ qualifying expenditure on plant and machinery assets for use in tax sites.
- Enhanced Structures and Buildings Allowances: accelerated relief to allow businesses to reduce their taxable profits by 10% of the cost of qualifying non- residential investment per year, relieving 100% of their cost of structures and buildings over 10 years.
- Employer National Insurance Contributions: zero-rate Employer NICs on salaries of any new employee working in the tax site for at least 60% of their time, on earnings up to £25,000 per year, with Employer NICs being charged at the usual rate above this level. This relief can be applied for 36 months per employee.
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