Following Brexit, the UK government have announced the introduction of new Freeports that may act as hubs for global trade and investment in the UK. These so-called “Free Zones” are special economic customs zones located within a Freeport in the UK. Exclusive customs, VAT and excise rules apply within the Free Zone, making it easier or more cost efficient for operators to import, store and process imported goods in these zones.

The aim of the new measure is to create new jobs and reduce administrative burdens, thus accelerating the UK economy by an estimated 3bn pounds.

In total, the following 8 location as Free Zones shall be created in the UK.

  • East Midlands Airport
  • Felixstowe and Harwich
  • Humber
  • Liverpool City Region
  • Plymouth and South Devon
  • Solent
  • Teesside
  • Thames

Order SI 2021/1290, designates Teesside Freeport as the first Free Zone for the UK. The responsible authority for Teesside Freeport will be Casper Shipping Ltd. Now that Teesside has been designated as a Free zone, other Freeports are to follow. According to HMRC, Thames and Humber are next in line to be designated as Free Zones.

In order to make use of a UK Free Zone, an authorisation for a so-called ‘Freeport customs special procedure’ is required. Applying for the Freeport customs special procedure can be done by completing the application form and sending this to HMRC by email or post. Please note that, currently, this procedure cannot be used for excise goods or certain controlled goods.

Furthermore and under certain conditions, operators can also choose to apply an existing customs special procedure within the Free Zone.

Lastly, the Free Zone includes as a zero VAT-rate for specified supplies within the Free Zone.

For a map of the Teesside Freeport, please visit: https://www.gov.uk/government/publications/map-of-teesside-freeport-customs-site.

The author acknowledges the assistance of Norrtje Figee with this blog post.