What do the new investment zones mean?
27 September 2022
The government has committed to working with local councils and devolved administrations to bring new investment zones across the UK.
According to the government, these zones will bring tax incentives, simplify planning restrictions and drive growth. While similar in concept to freeport tax sites, they are distinct in operation and function.
Specified sites in England will receive time-limited tax incentives over the next ten years. In Scotland, Wales and Northern Ireland, the investment zones will be delivered with devolved administrations and local partners.
Businesses within the zones will receive 100% relief on business rates for newly occupied premises and some existing business will also qualify if they expand within the zone. For 25 years, the local council will receive 100% of business rate growth above an agreed threshold.
Capital allowance and structures and buildings allowances are to be enhanced for businesses within the zones. As well as a full stamp duty land tax relief for land and property bought for commercial use or development or new residential developments.
Importantly for payroll professionals, new employees who work in the tax sites will be eligible for zero-rate employer NI contributions up to £50,270. Employees need to work at least 60% of their time in the site. Employer NI contributions over £50,270, will be charged at the usual rate.
Investment zones are currently not included in the costings of the Growth Plan as insufficient data about their implementation is available.
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