The Budget outlines the introduction of ‘Freeports’, areas in which a number of tax and other incentives will operate to encourage trade. Eight areas in England have been announced, with discussions in progress to extend the concept in the other nations of the United Kingdom. The enhanced tax reliefs will include 10% Structures and Buildings Allowances (instead of 3%), 100% First Year Allowances for plant and machinery, full relief from Stamp Duty Land Tax, full Business Rates relief, and relief from Employer National Insurance Contributions. The reliefs will depend on designation as a ‘tax site’ within a Freeport and will run until 30 September 2026.
The English Freeports announced so far are East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth and South Devon, Solent, Teesside and Thames. They are expected to start operating in late 2021.
The Budget includes several mentions of increased efforts to crack down on avoidance, evasion and non-compliance. The Government intends to invest £180 million in additional resources and new technology for HMRC in order to bring in £1.6 billion of additional tax revenue between now and 2025/26. The benefits are supposed to include ‘enabling taxpayers to more easily access tax services and make the collection of tax and payments to taxpayers easier’, but the overall effect is clearly intended to raise revenue.
£100 million will also be invested in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud within COVID-19 support packages. HMRC’s ability to distribute money has been one of the success stories of the pandemic, but giving the cash to people who need it has involved taking the risk that the system can be exploited. They are now going to try to find the people who took advantage.