What is an Investment Zone? Where are Investment Zones located? What are the tax advantages of running a business from an Investment Zone? When are the reliefs available?
This is a freeview 'At a glance' guide to Investment Zones.
Special tax sites in or connected with Investment Zones benefit from a package of tax reliefs which include:
- Stamp Duty Land Tax (SDLT) relief.
- Enhanced capital allowances of 100% for plant and machinery.
- Enhanced Structures and Buildings Allowances.
- Relief from secondary Class 1 National Insurance Contributions (Employer NICs) for eligible employers on the earnings of eligible employees up to £25,000 per annum.
- Relief from business rates.
These Investment Zones reliefs were originally intended to be available during a five-year period, but an extension to ten years was announced at the 2023 Autumn Statement subject to ongoing codesign of proposals and agreement of delivery plans. This sees the reliefs end in 2033-34.
A matching extension of the Investment Zones programme in Scotland and Wales to ten years was announced at the 2024 Spring Budget.
HMRC has produced an index see Investment sites map
The scheme proposes that twelve sites will be introduced across Great Britain. The first eight investment zone sites in England, are to be:
- The proposed East Midlands Mayoral Combined County Authority: announced on 22 November 2023.
- Greater Manchester Mayoral Combined Authority: announced on 22 November 2023.
- Liverpool City Region Mayoral Combined Authority: announced as the second zone on 26 July 2023.
- The proposed North East Mayoral Combined Authority.
- South Yorkshire Mayoral Combined Authority: announced as the first zone on 17 July 2023.
- Tees Valley Mayoral Combined Authority.
- West Midlands Mayoral Combined Authority: announced on 22 November 2023.
- West Yorkshire Mayoral Combined Authority: announced on 22 November 2023.
In June 2023, two Scottish Investment Zones were announced:
- Glasgow City Region.
- North East of Scotland.
In November 2023 two Welsh investment zones were announced:
- Wrexham and Flintshire.
- Cardiff and Newport.
The 2024 Spring Budget announced that details on the Northern Ireland Enhanced Investment Zone would be published soon.
SDLT relief
Full relief will be available for purchases of land or buildings which are:
- Acquired for qualifying commercial purposes, which includes development for commercial use.
- Used for such purposes in a control period of up to three years.
Capital allowances
- A 100% first-year (enhanced) Capital Allowance for companies’ qualifying expenditure on plant and machinery assets for use in designated tax sites.
- A 10% enhanced Structures and Buildings Allowance on the cost of qualifying non-residential investment means businesses can obtain 100% relief for the cost of their structures and buildings over a 10-year period.
Business rates
- 100% relief from business rates on newly occupied business premises and certain existing businesses where they expand in Investment Zone tax sites.
Employer NICs
- A zero-rate of Employer NICs on salaries of any new employee who work on the tax site:
- For at least 60% of their time.
- On earnings up to £25,000 per year with Employer NICs being charged at the usual rate above this level.
- For a period of 36 months per employee.
Useful guides on this topic
Freeports: Tax breaks
What are Freeports? Where are they located? What are the tax advantages?
External links
Policy paper: Investment Zone special tax sites
Policy Prospectus: Investment Zones
New UK investment zones announced to grow the economy in Scotland
Policy paper: Investment Zones update
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