Businesses operating in Scotland's two green freeports Inverness and Cromarty Firth Green Freeport (ICFGF) and Forth Green Freeport will be able to benefit from a range of Scottish and UK tax reliefs, including a relief from employer's national insurance contributions (NICs) on the first £25,000 of the salary of new employees working in the green freeport tax sites.
Which employers can claim the Freeport NIC relief?
Employers with a business premises in a green freeport tax site can claim the relief. The ICFGF tax sites have been "designated" with effect from 8 April 2024 and plans of the five ICFGF tax sites are now available – see our blog Inverness and Cromarty Firth Green Freeport tax sites designated. The tax sites for the Forth Green Freeport are expected to be designated soon.
Which employees does the relief apply to?
The Freeport NIC relief applies to employees who spend 60% or more of their time working in a single green freeport tax site, and who are "new" to the company, i.e. within the first 36 months of their employment.
How much relief is available?
There are no employer's NICs due on the first £25,000 of the salary paid to a qualifying employee. The relief only applies to employer's NICs - employee's NICs are still payable.
How long can you claim the Freeport NIC relief for?
The NIC relief can be claimed for the first 36 months of a new employee's employment.
How do you claim the Freeport NIC relief?
A new ‘Freeport Upper Secondary Threshold' (FUST) is being introduced, set at £25,000, and HMRC have introduced new National Insurance Category Letters. The employer's NIC relief is claimed by applying the relevant National Insurance contributions Category Letter when running payroll. For further detail see HMRC's guidance - Check if you can claim National Insurance relief in UK Freeport tax sites.
Contributors
Director of Corporate Tax
Solicitor
