A Freeport is a designated geographic area within the UK where goods can be imported, stored and re-exported with certain advantages and incentives. These incentives are designed to attract investment, boost economic activity, create jobs, and enhance trade. This was part of the governments leveling up exercise and the Freeport in the North West is in the Liverpool city region.
So what are the main benefits of a Freeport?
If you are importing and/or exporting there are considerable advantages in using a Freeport to conduct your business. When you import goods you would normally pay VAT and Duty on the imported goods as part of the customs clearance.
However, if you import directly into a Freeport zone, then the VAT and Duty is suspended. No VAT and duty is paid until the goods enter the UK domestic market. So for example, if you import in bulk during the summer so that goods are ready for sale in the winter, under normal circumstances you would have to pay the VAT and duty when the goods arrive in the UK. Using a Freeport would defer this payment until the goods leave the Freeport warehouse. This will give you a considerable cash flow advantage as cash is not tied up in your stored goods.
Additionally, if you re-export those goods directly out of the country, then there is no VAT or duty paid at all.
Your goods can also benefit from duty inversion, which is where the goods leaving the Freeport attract a lower tariff than their component parts so that the duty is calculated on the final goods rather than the sum of its parts. You have the option to choose the lower rate of duty.
The customs clearance process is also simplified for importing animal products or controlled substances. Customs checks on these items can be suspended until they are removed from the Freeport.
Where raw materials are imported, and then used in a manufacturing process here in the UK, and then the finished goods are exported, then potentially, there is no duty payable.
There is no time limit for storing the goods within the Freeport and customs declarations are simplified when using a Freeport. This is a huge opportunity to simplify the importing and exporting procedures that have come in since Brexit.
So you can see there are considerable benefits in using a Freeport for importing and exporting which can save you considerable sums in VAT and duty along with improving the cash flow of your business. In addition, it is right here on your doorstep.
If you need any further information about Freeports, please get in touch with Steven Glicher by either calling the office on 01625 669669 or email SGlicher@harts-ltd.com
