The UK Government recently announced its intention to create up to 10 ‘freeports’ across the country. These are essentially special economic zones, and characteristically offer looser customs rules with the aim of attracting investment, but are also known to provide resident businesses with a wider set of preferential treatments including tax reliefs.
Freeports are an issue we are concerned about due to the likelihood that they will exacerbate tax avoidance and evasion in the UK, encourage a global race to the bottom on corporation tax, create unfair advantages to a select group of businesses, and, attract illicit actors, such as money launderers.
In response to a consultation by the Department of International Trade, we have written to ask that the question of freeport establishment be consulted on at a much more fundamental level. We are particularly concerned at the lack of detail on the tax reliefs and legal compliance relaxations that will be granted.