Government Announces New ‘Investment Zones’ Initiative as Part of Growth Plan

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Government Announces New ‘Investment Zones’ Initiative as Part of Growth Plan

Government Announces New ‘Investment Zones’ Initiative as Part of Growth Plan

The Government has announced that as part of its Growth Plan published last week, it will be establishing a number of new ‘Investment Zones’ in 38 local authorities in England.

According to the Government, these new zones will liberalise planning frameworks, which in turn will encourage investment and development and create economic growth.

Potential Benefits of Investment & Development in the New Investment Zones

The Government has stated that the benefits of these new Investment Zones will be as follows:

Lower taxes

Businesses located in specific sites will be assisted by time-limited tax benefits over the next 10 years, specifically:

  • Business rates - 100% business rate relief on newly occupied and expanded premises;
  • Stamp Duty Land Tax - full stamp duty relief on land and buildings bought for commercial or residential development;
  • Employer National Insurance contributions relief – a zero rate for employer national insurance contributions on new employees working in the tax site for at least 60% of their time, on earnings up to £50,270 per year;
  • Enhanced Capital Allowance* - 100% first year enhanced capital allowance relief for plant and machinery used within designated sites; and
  • Enhanced structures and building allowance - accelerated enhanced structures and buildings allowance relief of 20% per year.

*Click here to find out more about Capital Allowance savings with our sister firm, STax.

Accelerated development

Designated development sites for housing and commercial development will be established, at which accelerated development will be fully supported.

Liberalising planning laws

The need for planning applications in these new Investment Zones will be reduced, and where such applications are still necessary, the process will be radically streamlined.

Support for local growth

Local authorities hosting Investment Zones will receive a single local growth settlement.

Agglomeration effects for businesses

If businesses strategically place themselves in a new Investment Zone, they will be able to take advantage of not only lower taxes, but also a quicker, more efficient, and easier planning application process (if this is required at all).

When Will Investment Zones Be Established?

This new initiative appears to be in the early stages at present. The Government has announced that it plans to work in partnership with local authorities in order to deliver these new Investment Zones, and is currently in discussions with the 38 local authorities in order to agree the sites for these new zones.

If you would like to read more about this, a copy of the Government’s Investment Zone factsheet can be found here.

Get in touch

If you have any queries relating to this article, or require any advice on issues you may be facing in the real estate sector, please contact Nicholas Ripper.

This article was written with the assistance of Kate Baggs.