24.2.2025 | Tax

Freeports are designed to boost trade, investment, and job creation, unlocking significant cost savings and new opportunities. As Freeport East marks its second birthday, Andrew Diver, Head of Tax at accountancy firm Beatons, looks at how you can leverage the benefits available.

Freeport East, a low-tax and low-regulation business zone, has attracted £250 million of private investment since it started operating two years ago.

The area, which covers the ports of Felixstowe in Suffolk and Harwich across the water in Essex and the Gateway 14 business park near Stowmarket, has also attracted nearly 2,000 jobs.

So, what is the secret to its success?

Freeports are designed to promote job creation and regeneration, boosting trade, investment, and innovation. Companies operating within these zones benefit from relaxed customs and planning regulations, simplified import and export procedures, enhanced trade promotion, and additional support for innovation.

There are also several tax incentives for businesses located within the designated Freeport zone that engage in eligible activities such as manufacturing, trade, logistics, warehousing, or transport-related services and invest in qualifying assets such as land, machinery, or workforce expansion.

These include:

Stamp Duty Land Tax relief

If you buy or lease commercial property within the Freeport zone before September 2026, you may qualify for full or partial relief on stamp duty. This is designed to attract businesses to the Freeport area and encourage expansion.

Enhanced capital allowances

Businesses investing in plant and machinery within the Freeport can claim 100% first-year tax relief. In the first year, any equipment, vehicles, or technology purchased for business operations can be fully deducted from taxable profits, reducing corporation tax liability.

Business Rates relief

Companies setting up new premises or expanding within the Freeport can receive up to 100% relief on business rates for five years. With rising overhead costs, this can offer significant long-term savings for businesses looking to grow.

National Insurance Contributions (NIC) relief

Employers hiring new staff within the Freeport area can claim NIC relief on salaries up to £25,000 per year per employee. This directly reduces the cost of workforce expansion, making it more attractive to create new jobs in the region.

Customs and Trade Tariff benefits

Businesses can import goods into the Freeport without paying customs duties as long as they are stored or processed before being re-exported. This benefits manufacturers and exporters who need to import raw materials before turning them into final products.

Freeports in action

Magnum Logistics is a business taking full advantage of its Freeport location.

For Eddie Ryan, Commercial Director, the Freeport Effect is twofold: It offers a prime location for growth and financial incentives that help them unlock cost savings and access new opportunities.

He said, “Our strategic, port-centric location and 24/7 operations have enabled us to exceed sales forecasts, particularly in our domestic pallet logistics services, which increased by over 30%, and our warehousing operational volumes, which increased by over 70% each, with a very strong performance in Q4.”

If you would like advice on Freeport benefits, contact the Beatons team today. www.beatons.co.uk