Welsh Freeports - The two winning bids are...

The two winning bids for the new Welsh Freeports have been announced.

Port Talbot

The two winning bids for the new Welsh Freeports have been announced having been jointly selected by the Welsh and UK Governments:

  • The Celtic Freeport (Milford Haven and Port Talbot), and
  • Anglesey Freeport

This follows on from the existing eight Freeports operating across England and the recently announced two Green Freeports in Scotland.  Each Freeport will be supported by up to £26 million in non-repayable start-up funding, whilst promoting fair work opportunities and prioritising environmental sustainability.  Specifically designated sites will benefit from incentives such as simplified customs procedures and development flexibility.  The Freeports will benefit from various tax breaks such as relief on customs duties, the retention of business rates above an agreed level, SDLT exemptions, NIC and business rates reductions, and enhanced rates of capital allowances – 100% for plant & machinery and 10% for structures and buildings allowances (boosted from the default 18% and 3% annual allowances respectively).

The two new Freeports, one North and one South of Wales, are expecting to create upwards of 20,000 new jobs by 2030.  It is expected that The Celtic Freeport could attract £3.5 billion in inward investment, focussing on low carbon technologies, such as floating offshore wind (FLOW), hydrogen, carbon capture, utilisation, and storage (CCUS) and biofuels to support the accelerated reduction of carbon emissions.  Whilst Anglesey Freeport aims to attract £1.4 billion, concentrating on developing the Energy Island Programme (EIP) by focusing on marine energy technology testing on the seabed (tidal and wind).

Following their comments regarding the announcement of the Scottish Green Freeports, The British Ports Association (BPA) has again called for more widespread use of these designations, noting that all ports across the UK could benefit from the Freeports initiative, allowing other sites to grow simultaneously.

There are some significant benefits for the winning Freeports locations across Wales, Scotland and England, but as we noted in our news release on the Scottish Green Freeports earlier in the year, many of the incentives are currently expected to end on 30 September 2026 creating significant timing issues for those involved.  Comparing these with the English site that progressed through this process at the end of 2021 and beginning of 2022, it has taken quite some time to get projects off the ground, with many eating substantially into their initial five-year incentive window by nearly two and half years.  It is therefore important for investors and operators within the Freeports locations to ensure that they are factoring in the deadlines for the incentives so as to make the most of the tax reliefs on offer - or look to have active and open dialogue with the respective Governments about extending the cut-off date.

These two Welsh Freeports will now develop an outline business case and are expected to become operational later this year.

Please do contact the team on 0345 230 6450 or hello@e3consulting.co.uk with any queries or for assistance with your property tax matters. We look forward to speaking with you soon.

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