Specialist Tax News

New investment zones

The Government is in discussion with 38 local authority areas in England to set up ‘Investment Zones’ in specific sites within their area.

Each Investment Zone (IZ) will offer generous, targeted and time limited tax cuts for businesses along with liberalised planning rules to release more land for housing and commercial development. These will be hubs for growth, encouraging investment in new shopping centres, restaurants, apartments and offices, and creating thriving new communities. The tax incentives under consideration are:

  1. 100% Business Rates Relief– on newly occupied or expanded business premises in IZs.
  2. 100% first year allowance – for companies with qualifying expenditure on assets for use in IZs.
  3. Enhanced Structures and Buildings Allowance– to allow businesses to reduce their taxable profits by 20% of the cost of qualifying non-residential investment per year, relieving 100% of their cost of investment over 5 years.
  4. Zero-rate employer NIC – on salaries of any new employee working in the IZ for at least 60% of their time, on earnings up to £50,270 per year, with Employer NICs being charged at the usual rate above this level.
  5. Full Stamp Duty Land Tax (SDLT) relief – for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for residential developers.

A list of the 38 local authorities taking part in discussions can be viewed in this factsheet – www.gov.uk/government/publications/the-growth-plan-2022-factsheet-on-investment-zones.