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Enterprise Zones and Capital Allowances

If you have the opportunity to locate your business in an enterprise zone (EZ), you might have the opportunity to claim enhanced capital allowances (ECAs).

EZs provide simplified planning and business rates discounts. Some EZs also provide ECAs for qualifying plant (100% tax relief in the first year). These are applicable only to trading companies, for expenditure on plant that is unused (i.e. not second hand). EZs are a government scheme to help businesses grow in selected areas by supporting them with benefits such as business rates discounts, good transportation links, high speed internet and ECAs.

The following example shows the benefits between claiming capital allowances in an enterprise zone as opposed to claiming outside an enterprise zone:

A company buys offices for £1m outside an EZ. This might generate capital allowances of £300,000. The overall tax saving would be £57,000 for a business paying tax at 19%. Ignoring the annual investment allowance (AIA) (which might be used up by other expenditure incurred by the company, or even by a connected company), the overall tax saving would be given over a number of years. If, however, the same business bought offices within an EZ, the overall tax saving of £57,000 could be given in the first year. This is a considerable benefit to the business.

Usually each EZ is split up into several different smaller areas and the benefits of each of these areas differ between utilising business rate discounts or ECAs. We have compiled a list of all the EZs with areas which qualify for ECAs below:

ECA Enterprise Zones (List accurate 31/07/2017)

Black County Enterprise Zone (Darlaston)

Darlaston - Phoenix 10

Darlaston - Gasholders & Holmans Land

Blackpool Enterprise Zone

Blackpool Airport Enterprise Zone

Ceramic Valley Enterprise Zone (Stoke-on-Trent)

Etruria Valley

Cheshire Science Corridor Enterprise Zone

Hooton Park, Ellesmere Port

Protos (Ince Park), Ellesmere Port

New Port Business Park, Ellesmere Port

South Road site, Ellesmere Port

Parts of Thornton Science Park

Cornwall Enterprise Zone

Aerohub (Newquay Cornwall Airport)

Hillhouse International Enterprise Zone

Humber Enterprise Zone

Able Logistics Park

Paull - Phase 1 & 2

Goole 36

Able Marine Energy Park

Humber Gate

Hobson Way

Stallingborough

Alexandra Dock

Leeds City Region Enterprise Zone

Temple Green

Logic Leeds

Luton Airport Enterprise Zone

Luton Airport

North East Enterprise Zone

Blyth Estuary

North Bank of the Tyne

A19 Corridor, Sunderland

North Bank of the Tyne (extension)

Holbern Riverside, South Shields

Ashwood Business Park, Ashington

Port of Sunderland

International Advanced Manufacturing Park

Oceansgate Enterprise Zone

Royal Docks Enterprise Zone

Royal Albert Docks

Sheffield City Region Enterprise Zone

Sheffield/Rotherham - Tinsely Park - Outo Kumpu Shepcote Lane

Sheffield/Rotherham - AMP/Waverley - J33 M1

Sheffield/Rotherham - Smithywood Business Park - S35 1QP, J35 M1 Sheffield

Markham Vale - J29a, M1

Tees Valley Enterprise Zone

South Bank Wharf, Redcar & Cleveland

Hartlepool Port Estates, Hartlepool

New Energy & Technology Park, Stockton-On-Tees

Wilton International, Redcar & Cleveland

 

If you are planning on relocating, you should consider the benefits of EZs. New EZs have been introduced over the last few years with more expected to come.  Stuart Rivers Associates would be pleased to advise on maximising ECA first-year tax savings.

We hope that this short article introducing EZs has been of interest and we would be happy to discuss any point with you in more detail.