The Government wants to designate up to 38 areas across England as investment zones which will benefit from special tax reliefs and relaxed planning laws.
The tax reliefs will include:
- employers’ Class 1 NIC at 0% on earnings of new employees employed in the zone for at least 60% of their working hours, capped at earnings of £50,270 per person (normal employers’ NIC will apply to earnings above that level);
- 100% first year capital allowance on the cost of equipment used in the zone;
- no SDLT payable on the acquisition of commercial buildings bought for use or development in the zone;
- no SDLT on land or buildings acquired to build or convert into new homes in the zone; and
- 100% relief from business rates on newly occupied buildings.
The local authorities for the proposed investment zones need to give consent before the zone is activated and in return they will receive all of the additional business rates collected from within the zone. However some control over planning decisions within the zone will be lost.
Areas in Scotland, Wales and Northern Ireland could also be designated as investment zones if the devolved administrations for those areas agree.