A freeport custom site can simplify customs procedures and reduce the tariffs you pay when importing and exporting goods. In this instalment of our Freeport Reports series, our VAT experts detail the VAT and customs advantages available in the East Midlands Freeport custom site and the impact they could have on your business.

Freeports were re-introduced to the UK following the March 2021 budget, with the hope they would become powerful catalysts for commerce and fuel economic activity within targeted regions.

The East Midlands Freeport – like all freeports across the country – operates outside the UK for VAT and duty purposes. This means business owners that operate within the freeports custom site can benefit from simplified customs procedures and the duty-free movement of goods entering a freeport.

In this article, we provide an overview of the East Midlands Freeport customs site, shedding light on how it works and the various VAT and customs benefits that could be available to your business.

For a detailed overview of what freeports are and where they are located, read the first article in our Freeport Reports series for an introduction to freeports.

What is a freeport customs site?

A freeport customs site (also known as a ‘free zone’) is a set area within a freeport where approved businesses can import selected goods with simplified customs documentation and without paying tariffs.

To be operational, a UK freeport must have at least one designated customs site managed by an authorised operator. Customs sites may vary in size based on the freeport it is located in.

VAT and customs advantages of the East Midlands Freeport

Freeport customs sites are designed to invite domestic and international investment by encouraging businesses to import and export goods, and create trade hubs.

The East Midlands Freeport offers a range of VAT and customs benefits, providing your business with valuable opportunities to enhance operational efficiency and laying the groundwork for increased levels of trade.

Duty suspension

As a business owner trading in a freeport customs site, you can benefit from a suspension of duty tariffs on imported goods from outside the UK. This means you are not required to pay customs charges or taxes as long as the goods remain in the freeport.

Duty exemption

The East Midlands Freeport offers duty exemption on goods that are imported into the freeport customs site and then re-exported to the international market. This means that you would not have to pay tariffs and charges in the UK when dispatching goods to another country. It is worth noting that you may still be required to pay tariffs at the point of import once goods reach their intended destination.

Simplified procedures

Operating within a freeport customs site grants you access to simplified customs procedures. With reduced bureaucratic hurdles and paperwork requirements, the customs process becomes faster and more efficient. This could shorten transit times and reduce costs for your business.

How to apply to use the East Midlands Freeport customs site

If your business plans to move goods into or out of the East Midlands Freeport customs site and wants to access these benefits, you must apply to HMRC to use the freeport customs special procedure or an existing customs special procedure. An initial agreement must be in place with the customs site operator before applying.

Once approved, your business will be required to notify the customs site operator of any movements of goods into and out of the freeport and make the necessary declarations. You will also need to maintain records of your company’s freeport operations.

Reduce tariffs and streamline your business operations with expert VAT support

Are you already operating in the East Midlands Freeport or considering a future move to the area? A freeport customs site could not only enhance your domestic operations but potentially open the door for greater international trade for your business. However, there are regulations and requirements involved in VAT on imports and exports that require specialist tax advice if you wish to avoid making costly mistakes.

Our specialist VAT advisory team has a wealth of experience in helping businesses across all sectors to navigate the intricacies of VAT and bolster their commercial transactions.

Contact us today to find out more about how our experienced VAT and Indirect Tax accountants in the Midlands could help you access eligible tax reliefs and to discuss whether relocating to the East Midlands Freeport customs site is the right move for your business.