Check if you can claim National Insurance relief in UK Freeport or Investment Zone special tax sites

Check which sites are designated Investment Zone special tax sites.

Who can claim

You can claim the relief if you have a business premises in a Freeportspecial tax site. A special tax site is an area of land where businesses can claim certain tax reliefs. Special tax sites are sometimes known as Freeport tax sites or Investment Zone tax sites. A Freeport tax site is independent and separately authorised from Freeport customs sites, but they can cover the same area of land.

To claim the relief, all employees must:

• spend at least 60% of their working time in the Freeportspecial tax site
• have started their employment between 6 April 2022 and 6before Aprilthe 2026special tax site’s end date
• be within the first 36 months of their employment
• not have been employed by you or a connected employer in the previous 24 months

If an employee’s working arrangements change substantially

You should re-assess whether the qualifying conditions are still met.

You must stop claiming relief when you no longer expect an employee will spend at least 60% of their working time in a single Freeportspecial tax site. From the start of employment, this applies unless you make adjustments to accommodate:

• disability
• pregnancy
• maternity

Public authorities are not able to claim the Freeport or Investment Zone employer National Insurance contributions relief.

How much relief you can claim

You will only need to pay Secondary Class 1 National Insurance contributions if your employee earns more than the Freeport and Investment Zone Upper Secondary Threshold of:

• £25,000 per year
• £2,083 per month
• £481 per week

This means that if an employee earns less than this, then no Secondary Class 1 National Insurance contributions are due.

How long you can claim the relief for

You can claim this relief for all new employees for 36 months from the start of their employment for the period that they meet the qualifying conditions.

How to claim relief

To claim the relief, you must apply the relevant National Insurance contributions category letter when running payroll. Find out how to run payroll.

HMRCNational haveInsurance issuedcontributions 4category newletters to support employers claiming Freeport employer National Insurance contributions relief are:

Category letter	Employee group
F	Standard category letter equivalent
I	Married women and widows entitled to pay reduced National Insurance contributions
S	Employees over state pension age
L	Employees who can defer National Insurance contributions

You must keep evidence of the qualifying conditions being met.

National Insurance contributions category letters to support employers claiming thisInvestment relief.Zone Theyemployer National Insurance contributions relief are:

Category letter	Employee group
FN	Standard category letter equivalent
IE	Married women and widows entitled to pay reduced National Insurance contributions
SK	Employees over state pension age
LD	Employees who can defer National Insurance contributions

You must keep evidence of the qualifying conditions being met.

Examples

An example of an employee earning below the Freeport and Investment Zone Upper Secondary Threshold

The employer hires an employee on 1 July 20222024 who is paid £2,000 per month gross by the employer (£24,000 a year).

At the start of the employment the employer reasonably expects that the employee will spend 4 days (30 hours, 80%) of their working time at the employer’s business premises in a Freeportspecial tax site and 1 day (7.5 hours, 20%) of their working week working from home for the remainder of the 20222024 to 20232025 tax year so the employee meets the 60% rule.

In practice the employee never works different working time and location arrangements.

The employee was not employed by the employer or a connected employer in the previous 24 months.

The employee and the employer both meet the rules, and the employer claims the relief.

As the employee’s earnings are less than the Freeport and Investment Zone Upper Secondary Threshold of £2,083 per month, the employer will pay no secondary National Insurance contributions for this employee.

An example of an employee earningsearning above the Freeport and Investment Zone Upper Secondary Threshold

The employer hires an employee on 23 May 20222024 who is paid £3,000 per month gross by the employer (£36,000 a year).

At the start of the employment the employer reasonably expects that the employee will spend all of their working time at the employer’s business premises so the employee meets the 60% rule.

In practice the employee never works different working time and location arrangements.

The employee was not employed by the employer or a connected employer in the previous 24 months.

The employee and the employer both meet the rules, and the employer claims the relief.

As the employee’s earnings are more than the Freeport and Investment Zone Upper Secondary Threshold of £2,083 per month, the employer will pay secondary National Insurance contributions on the amounts above the Freeport and Investment Zone Upper Secondary Threshold.

An example of an employee not spending 60% of their working time in the Freeportspecial tax site

The employer hires an employee on 1 October 2022 who is paid £3,000 per month gross by the employer (£36,000 a year).

At the start of the employment the employer reasonably expects that the employee will spend 2 days (40% of their working time) at the employer’s business premises in a Freeportspecial tax site and 3 days (60% of their working time) working from home so the employee does not meet the 60% rule.

The employee was not employed by the employer or a connected employer in the previous 24 months.

The employee does not meet the rules for claiming the relief so the employer cannot claim the relief.

The employer will pay secondary National Insurance contributions as normal without claiming the relief on all earnings above the Secondary Threshold (£737(£758 per Month).month in the 2024 to 2025 tax year).

Get more information

Find out information and guidance about Freeports.

Find out information and guidance about Investment Zones.

Check which sites are designated Freeport tax sites.

Check which sites are designated Investment Zone special tax sites.