Further details of the tax and customs aspects of the Government’s plans for new Freeports are included in the bidding prospectus.
On 16 November 2020, the Government opened the bidding process to establish what it describes as “new, innovative Freeports that will boost the economy, create thousands of jobs and turbo-charge post-Brexit trade”. A number of points of detail were missing from the consultation response document published last month and some of these points have been included in the bidding prospectus. This article provides an update on the tax and customs aspects of the proposals now we have this additional information.
We reported on the new plans for Freeports outlined by the Government last month in Tax Matters Digest on 19 October 2020. The bidding prospectus was then published on 16 November, providing further information including the points below.
Details of the ‘duty-free’ operation of Freeports are included in section 3.4 of the bidding prospectus. Businesses within the Freeport will gain duty benefits currently available but without the individual application/authorisation processes.
Freeport Operators will be required to hold particular authorisations. That process has not yet been finalised and the prospectus only outlines the expected requirements which will be based on existing Authorised Economic Operator security and safety (AEOS) standards. Operators will also need to designate part of the customs site as a temporary storage area, as per the standard UK customs import rules. The document states that HMRC will provide detailed guidance on the authorisation requirements in due course.
What is clear is that the Freeport Operator will be jointly and severally liable for any duty payment where there is a breach of conditions. The operator will be responsible for security of the perimeter and effective ‘stock control’ within the site and will have to maintain an IT system that meets the requirements of HMRC/Border Force in terms of ‘Inventory control’.
Further information on tax included the following:
The Government has requested bids be submitted by Friday 5 February 2021, with decisions then being made in spring.
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