British finance minister Rishi Sunak is preparing to introduce sweeping tax cuts and an overhaul of planning laws in up to 10 new "freeports" within a year of the UK's becoming fully independent from the European Union in December, the Sunday Telegraph said.
Sunak will open the bidding for towns, cities and regions to become freeports, which would place them outside UK customs territory, in his autumn budget later this year, the newspaper said, citing a copy of the plans it said it had seen. Sunak plans to confirm the successful bids by next spring and introduce major tax and regulatory changes in those areas at next year's budget, the Telegraph added.
They include research and development tax credits, generous capital allowances, cuts to stamp duty house-purchase tax and business rates, and local relaxations of planning laws.
The successful bidders designated as freeports will ultimately be legally outside UK customs territory, with goods imported, manufactured or re-exported without incurring national tariffs or import VAT until they enter the rest of the economy.
The paper said the government believes the policy can transform ports into international hubs for manufacturing and innovation, with the economic and regulatory incentives designed to encourage firms to establish new factories and processing sites in the areas.
In a second wave of measures, customs duties, import VAT and national insurance contributions would be cut from April 2022, the paper said, making the freeports fully operational within 18 months of Britain's departure from the EU customs union and single market.