Freeport tax sites: capital allowances

HMRC has published new guidance on claiming enhanced first-year allowances and structures and buildings allowances in designated freeport tax sites.

Check if you can claim the enhanced capital allowance relief in Freeport tax sites covers:

• the qualifying conditions for a business to be eligible to claim relief for 100% of qualifying expenditure on plant and machinery, i.e. the business must be registered for corporation tax, the equipment must be new and designated for use primarily in a freeport tax site at the time the expenditure is incurred;
• how to claim relief; and
• when relief will be withdrawn, i.e. if the plant and machinery ceases to be used primarily for a freeport tax site in the first five years from when it was first used in the site.

Check if you can claim enhanced structures and buildings allowance relief in Freeport tax sites sets out:

• the qualifying conditions for businesses to claim the enhanced annual 10% relief, i.e. the business must be registered for either corporation tax or income tax, it must begin construction on the building or structure when the building is in a freeport tax site and the building or structure must be brought into use when it’s in a freeport tax site; and
• how to apportion relief between the enhanced allowance and the normal 3% rate of structures and buildings allowance.

Both sets of new guidance provide illustrative examples of how the reliefs will work in practice.

The enhanced capital allowances can be claimed for expenditure incurred from the date the freeport tax site is designated until 30 September 2026.