Frequently asked questions
Following our recent live events and virtual focus group, we have compiled a range of questions and answers covering various topics.
What is a Green Freeport?
What is a Green Freeport?
Green Freeports are places where business can be carried out inside a country’s land border, but where the normal tax and customs rules don’t apply in full. They have boundaries agreed with both the UK government and Scottish government.
They contain two types of sites where special rules apply, which can overlap. These are called ‘tax sites’ and ‘customs sites’. Companies can choose to locate themselves so that they profit from the benefits offered by one of these site types, or a combination of both.
Check out our “What is a Green Freeport” video.
What do Green Freeport’s do?
Green Freeports are intended to stimulate economic activity in their designated areas. The main intention is to attract inward investment to build new facilities such as manufacturers or research and development facilities which bring jobs to an area, taking advantage of the incentives available inside the Green Freeport area.
Following the winning bid announcement is Inverness and Cromarty Firth now a Green Freeport?
The Inverness & Cromarty Firth Green Freeport (ICFGF) is now in the final stages of the process in becoming an active freeport.
From securing the winning bid in January 2023, ICFGF, along with a number of public and private sector partners, have completed a number of legislative requirements in order to achieve freeport status. The most recent phase, which was the formal establishment of our tax sites by the UK Government in April 2024, has allowed us to now focus on the completion of our Final Business Case which will be submitted to UK and Scottish Governments in June 2024.
You can see our tax site maps here.
How will Inverness and Cromarty Firth Green Freeport be run?
Inverness & Cromarty Firth Green Freeport is an independent company limited by guarantee (CLG) which has a Board made up of a mixture of public, private and academic partners.
Find out more about our Board of Directors here.
Where can I find the Articles of Association?
The Inverness & Cromarty Firth Green Freeport Articles of Association can be found here.
How will existing businesses benefit?
The Green Freeport and the tax and customs incentives attached to it will attract new investors into the area; many of whom will need services, expertise and/or technologies from the local supply chain. This is already starting and the main sectors surrounding these investments are offshore wind and green hydrogen. Following the announcement, some other connected sectors are now starting to enquire about setting up in the Highlands.
We will be able to share more about this as details emerge and become public – many of these discussions are kept commercially confidential in their early stages.
Businesses will also benefit from the general uplift in economic activity in the area catalysed by the Green Freeport. They will also benefit from the expected increase in the labour force and from the training that will be delivered in the area to help people ensure they are ready for these new jobs.
In our Green Freeport, the National Insurance tax reliefs offered by the Governments will be reinvested into a training fund to provide skills and training for local people. This will be delivered via The PowerHouse project.
Check out our video “Can businesses benefit from the tax incentives or customs sites?”
What incentives are available to businesses?
Green Freeport status unlocks various tax incentives for businesses, encouraging them to set up facilities in the Highlands. For example:
- Land & Building Transaction Tax (LBTT) Relief.
- Enhanced Structures & Buildings Allowance (SBA): accelerated relief to reduce taxable profits by 10% of cost of investment every year for 10 yrs (compared to standard 3%p.a. over 33 1/3 yrs).
- Enhanced Capital Allowances (ECA): reduce taxable profits by full cost of qualifying investment in new plant/machinery in same tax period as cost was incurred.
- Employer NICS: 0% employer NICs on salaries of any new employee working in Green Freeport tax site. Applicable for <3 yrs per employee on earnings <£25,000p.a. threshold. NICs to be reinvested in training fund for our Green Freeport to prevent local displacement and incentivise training
- Non Domestic Rates Relief (NDRR): Businesses may be eligible for <100% relief from NDR on certain properties and property improvements within tax sites for <5 yrs from point of first relief.
Any growth in non-domestic rates over an agreed baseline will be retained by the Highland Council for the next 25 years and available for reinvestment within the Freeport boundary. It is hoped this will create a positive cycle of sustainable reinvestment; creating jobs and economic growth for decades and building on the initial few years of the Freeport status.
There are also customs benefits for companies importing / exporting materials or components via the customs sites that will be established within the Freeport. These include simplified customs procedures and cashflow benefits surrounding the payment of duty and/or VAT on components which are imported and re-exported. We are working hard with HMRC and the UK’s customs departments to better understand how these will operate in reality and will share more details in due course.
What does Green Freeport Employee mean?
Employees are classed as working within a Freeport tax site if they spend at least 60% of their working hours within that tax site.
What do Customs sites mean?
Inside a customs site, port operators and other companies are able to defer tax duty and import VAT on goods. If a product comes from outside of the UK into the customs site, such as a raw material or a component part, no tax is paid on that coming into the port unless it then leaves the port area and enters the UK.
What does this mean for manufacturers or producers?
If a manufacturer or a producer is located inside a customs site, it can handle those goods and use them to create their finished product.
They would only pay tax on their product if it then enters the UK. They can export to an international market without paying tax.
This could create a competitive advantage for Scotland versus producing goods abroad.
Will the Green Freeport provide training for new skills?
The National Insurance Contribution reliefs will be reinvested in the Inverness and Cromarty Firth Green Freeport into a training and skills development fund through The Powerhouse. This was important to the regional consortium who delivered the bid, as we didn’t want local businesses outside the Freeport fence to be at a disadvantage to those within in terms of wages paid. It is also part of the Fair Work pledge the Scottish Government pressed for in Green Freeports.
The idea is to give the local people the skills they need to find a job in the region’s renewables industry, delivering benefits to the local economy and strengthening local communities with green secure jobs.
What does Green Freeport status mean for the Highlands?
Our initial socio-economic impact analysis suggested that the region could expect 10,250 new jobs and around £3bn in inward investment from Green Freeport status over the coming years. This could reverse generations of depopulation and reinvigorate our region, through providing exciting, green careers for our working age population and for youngsters who will start their first jobs in the next 10-20 years.
We have already seen an increase in enquiries from companies wanting to establish facilities in our region; mainly those based abroad who want to service the renewables sector. This is new activity to Scotland and some is new activity to the UK. We have also seen local companies planning expansions and investments based on the announcement. One thing the consortium was very focused on was delivering new jobs and growth wherever possible, rather than simply moving or displacing activity from elsewhere in Scotland.
Green Freeport status has already put the Highlands on the map. We beat very strong competition from Glasgow and Aberdeen and the Prime Minister, Rishi Sunak, announced the award himself. This was on his first official visit to Scotland, when he flew into Inverness and came to visit Port of Cromarty Firth’s facilities in Invergordon. Many people in positions of power across our country didn’t know where Inverness and the Cromarty Firth was when we started this process. Many are now visiting the area, as we move into the final states of achieving active freeport status.
As a renewables hub Inverness and the Cromarty Firth will play a key role in regeneration and green job creation. We will be at the centre of delivering net zero for our country, through the support of the offshore wind and green hydrogen sectors. Encouraging innovation and creating an environment to attract new business.
There will be a “ripple effect” of indirect jobs provided by small start-up companies to supply and service all that is happening. People developing technology and expertise will, in the medium and longer term, be able to export these products and skills to help other countries decarbonise.
It really is an exciting time to be in the Highlands!
Will there be sufficient housing to accommodate the forecasted workforce?
The Highland business community is united in its vision to drive the region’s local economy, creating jobs, wealth and a bright future for people. The Green Freeport is at the heart of this, but its success will require collaboration and this includes ensuring we have supporting infrastructure in place, with housing being a significant part of that. A very important factor is ensuring the right mix of housing is available in the area, including affordable entry-level homes and accommodation for letting. We encourage the public and private sectors to work together to accelerate their vision for housing in the area to meet the growing need.”
Will there be an impact on the Cruise Ships and the tourists that these bring into the area?
There should be no impact on the Cruise industry or the tourists that they bring to the area.
Energy industry
Skills and Employment
Freeport Business Benefits
Freeport Local Impacts
Renewables and Environmental Consideration
Partners and Support Organisations
Regional Infrastructure Requirements
Tourism Impact
Inverness & Cromarty Firth Green Freeport
UHI House, Old Perth Road, Inverness, IV2 3JH
Phone: 0333 091 1985 | Email: [email protected]
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