Free Zones in the UK

An Expert's View about Free Trade Zones in the United Kingdom

Posted on: 26 Aug 2010

This information sheet summarises the key features of Free Trade Zones in the UK.

FREE ZONES This information sheet summarises the key features of Free Zones in the UK. The factors covered are: 1. Definition of Free Zones 2. UK Free Zones 3. Benefits of Free Zones 4. Placing goods in a Free Zone 5. Activities allowed in a Free Zone 6. Applying to operate a business in a Free Zone 7. Further information 1. DEFINITION OF FREE ZONES A Free Zone is a designated area in which non-European Union goods are treated, for the purposes of import duties, as being outside the customs territory of the European Union (meaning that import duties are not payable until the goods are released for free circulation). Customs duty and import VAT are only payable if: a) the goods leave the Free Zone and are placed into a European Union market, or b) the goods are used or consumed within the Free Zone. There are no special reliefs in Free Zones from other taxes, excise duties or local authority rates. Any supplies of goods and services within the Free Zone are subject to normal VAT rules. 2. UK FREE ZONES In the UK there are Free Zones in: a) England: Liverpool; Port of Sheerness (Kent); Port of Tilbury (Essex); and Southampton. b) Scotland: Prestwick Airport. Please see Appendix A for full contact details of all UK Free Zones. The key UK Government organisation responsible for Free Zones in the UK is HM Revenue & Customs. For further information, please see: or telephone 0845 010 9000 (for callers within the UK) or +44 2920 501 261 (for callers from overseas). 3. BENEFITS OF FREE ZONES In addition to the relief that is available throughout the UK on customs duties relating to the transhipment, handling and processing of goods destined for re- export, companies operating in Free Zones also receive the following benefits: a) simplified customs procedures, b) cash-flow benefits resulting from exemption of duty until the goods are exported or released into free circulation, c) additional security from the perimeter fence enclosing the Free Zone, and d) greater flexibility in determining the final destinations of goods (subject to any quota restrictions). 4. PLACING GOODS IN A FREE ZONE Goods that may be placed in a Free Zone include: a) non-European Union goods, b) European Union goods, and c) goods in free circulation which are still under customs control (because, for example, certain charges have not been paid, or proof of their arrival or particular use is required). 5. ACTIVITIES ALLOWED IN A FREE ZONE The following activities may take place in a Free Zone: a) ?Storage?. Goods accepted as ?Free Zone goods? by the Free Zone Manager may be stored in the Free Zone for an unlimited time (specific time limits may, however, apply to certain Common Agricultural Policy goods). b) ?Usual forms of handling?. Simple activities may be carried out on the goods to: ? preserve them in good condition, ? improve their presentation or marketable quality, or ? prepare them for distribution or resale. c) ?Processing goods?. This includes any operation that changes the condition of the goods (such as manufacturing or assembly). 6. APPLYING TO OPERATE A BUSINESS IN A FREE ZONE To run a business in a Free Zone, an operator needs prior authorisation from HM Revenue & Customs. To apply for authorisation, an operator should write to the appropriate HM Revenue & Customs office responsible for the Free Zone (see Appendix A) with the following information: a) the nature of the activity that is planned, b) a supporting letter from the Free Zone manager, c) the name, address and VAT number of the company, including the correct legal entity, d) the full names of the directors or partners of the company, e) details of any associated businesses, f) identity and details of any building in the Free Zone that will be used, g) a description of the goods involved, h) the origin of the goods and their customs status, i) details of any handling or processing to be carried out, j) methods of declaring goods to the Free Zone and removal from the Free Zone, k) details of the stock records to be maintained, including any computer software, and l) any other relevant information that is needed to ensure proper application of the arrangements. If the application is accepted, the operator will receive a letter of authorisation to proceed. If goods are to be placed in the premises of an operator who is already authorised, the owner of the goods does not need to apply for a separate authorisation and goods can be entered into the Free Zone under the existing approval. 7. FURTHER INFORMATION This information sheet was updated in March 2010. As information changes from time to time, please contact the organisations listed or UK Trade & Investment to confirm any item that you intend to rely on. This information sheet was produced by the Marketing Group of: UK Trade & Investment 9th Floor Kingsgate House 66-74 Victoria Street London SW1E 6SW Tel: +44 (0)20 7215 4957 Email: Website: APPENDIX A - UK Free Zones Free Zone Name and Free Zone Manager Supervising Customs Code Contact Office Liverpool Liverpool Freeport Leeds MTR/TP Team Maritime Centre Peter Bennett House Free Zone Port of Liverpool Redvers Close Code: FZL L21 1LA West Park Ring Road Leeds LS16 6RQ Tel: +44 (0)151 949 6017 Tel: +44 (0)113 389 4426 Fax: +44 (0)151 949 6020 Fax +44 (0)113 389 4373 Prestwick Airport Freeport Scotland Ltd Dundee EICS Ayr Caledonian House Free Zone KA8 9SL Greenmarket Code: FZK Dundee DD1 1HD Tel: +44 (0)1292 316347 Tel: +44 (0)1382 313317 Fax: +44 (0)1292 618678 Fax: +44 (0)1382 313332 Port of Sheerness Medway Ports Ltd Anchorage House Sheerness Docks High Street Free Zone Kent ME12 1RX Chatham Code: FZS Kent ME4 4NW Tel: +44 (0)1795 596596 Tel: +44 (0)1634 830933 Fax: +44 (0)1795 668516 Fax: +44 (0) 1634 887043 Southampton Free Southampton Free Trade Compass House Zone Ltd Romsey Road Zone Southampton Southampton SO16 4HP Code: FZN SO1 0HJ Tel: +44 (0)23 8077 2200 Tel: +44 (0)23 8079 7000 Fax: +44 (0)23 8078 1111 Fax: +44 (0)23 8079 7724 Port of Tilbury Free Port of Tilbury London Ltd Custom House Tilbury Dock, Tilbury Tilbury Dock, Tilbury Zone Essex RM18 7EH Essex RM18 7EJ Code: FZY Tel: +44 (0)1375 852300 Tel: +44 (0)1375 844121 Fax: +44 (0)1375 855106 Fax: +44 (0)1375 853207 Source: HMRC, 2010
Posted: 26 August 2010