Planning rules to be relaxed in investment zones

Newly created investment zones will lead to companies being offered tax cuts by the new Chancellor, Kwasi Kwarteng. The Governor revealed that consultations are in place with 38 English councils who have expressed an interest in developing the idea.

 

The devolved administrations in Wales, Scotland, and Northern Ireland are eligible, but are yet to publicly express an interest.

 

In return Rachel Reeves, the Labour shadow chancellor, suggested that the idea was "nothing new" and would simply move growth around the country, rather than create it. She said, "To support growth right across the country, we need to go further, with targeted action in local areas."

 

From a technical perspective investment zones will offer time-limited tax breaks at chosen locations, relax planning rules, and offer devolved funding for local authorities.

 

Additionally, there will be reductions to employers' national insurance bills, business rates, and stamp duty.

 

The proposal suggests that an employer who hires a worker for a job inside the zone will pay no national insurance on the first £50,000 they earn, Mr Kwarteng said.

 

In order to qualify for the incentives, the employee will need to work in the zone for at least 60 per cent of their time. Other tax perks will include 100 per cent relief from business rates for newly occupied premises, a 100 per cent capital allowance for spending on plant and machinery, and the ability to reduce taxable profits by up to 20 per cent per year for spending on non-residential buildings.

 

Commercial land, or buildings, purchased within the investment zones will qualify for 100 per cent relief from stamp duty. The tax incentives will apply for a period of 10 years.

 

Investment zones are also aimed at "unlocking housing" by featuring special development sites, and in these instances the planning processes will be sped up.

 

Local councils will be given dedicated funding to support the zones and will retain 100 per cent of the extra business rates generated by them.

 

The Chancellor has said, "incentives for business to invest, to build, and to create jobs right across the country. To support growth right across the country, we need to go further, with targeted action in local areas."

 

Additionally he commented, "We're [in] discussions with nearly 40 places, like Tees Valley, the West Midlands, Norfolk and the West of England, to establish investment zones."

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