What are Investment Zones?

Investment Zones are areas across the UK where central and local government will work with business and local partners to create the conditions for investment and innovation.

Investment Zones are located in areas with existing local strengths and significant untapped potential. They will deploy a range of interventions – including tax reliefs, planning mechanisms and innovation, skills and business support – to unlock opportunities for business and address barriers to private sector growth, creating more high-quality jobs for communities across the country.   

Each Investment Zone is focussed on supporting the growth of at least 1 of the following 5 priority sectors:

• advanced manufacturing
• creative industries
• digital and tech
• green industries
• life sciences

Investment Zones are locally-led initiatives, and businesses or stakeholders seeking to benefit from them should contact the relevant Investment Zone Accountable Body.

Each Investment Zone is different, reflecting the unique strengths and opportunities in each place and sector, however, all Investment Zones share the following core characteristics:

A defined economic area

Investment Zones will cover a defined economic area, where interventions will focus on facilitating the co-location of businesses and fostering collaboration between industry and research institutions. Tax relief sites are defined by a clear boundary and more information on the reliefs available, and where, is provided below.

Strong collaboration between industry and research institutions

At least one research institution with strengths in the relevant priority sector will support the development and delivery of each Investment Zone, creating unparalleled opportunities for your business to collaborate with leading cutting-edge research facilities in the local area.

Connecting business and the local community

Interventions will seek to strengthen the local labour market to provide the skills your business needs, ensure good connectivity between businesses and communities and provide support to enable spin-out and start-ups.

Strong local leadership

Mayors and local leaders with a vision for the area will work in partnership with business and innovation leaders within Investment Zones. They will also contribute resources and expertise, to support and maximise the impact of Investment Zones for local businesses and communities.

Where are Investment Zones?

The government has committed to establishing 13 Investment Zones across the UK. At Spring Budget 2023, 8 areas in England were invited to co-develop an Investment Zone proposal with government:

• Greater Manchester Combined Authority (GMCA)
• Liverpool City Region Combined Authority (LCRCA)
• North East Combined Authority (NECA)
• South Yorkshire Mayoral Combined Authority (SYMCA)
• West Midlands Combined Authority (WMCA)
• West Yorkshire Combined Authority (WYCA)
• East Midlands Combined County Authority (EMCCA)
• Tees Valley Combined Authority (TVCA)

All 8 Investment Zones in England are expected to commence operation in financial year 2024-25.

Established Investment Zones

The government has agreed final plans for 7 Investment Zones to date and is supporting local partners to deliver them. 

The East Midlands Investment Zone will create jobs and drive growth in the advanced manufacturing and clean energy sectors. Key locations include:

• Infinity Park, in Derby – tax reliefs available on designated site
• Explore Park, in Worksop – tax reliefs available on designated site
• Hartington Staveley – tax reliefs available on designated site

The Investment Zone will address a lack of R&D and innovation space, with local infrastructure investment and tax reliefs unlocking much needed sites. Tax reliefs will be used to unlock a constrained brownfield site in Hartington Staveley with opportunities to build on the nascent advanced rail cluster; support the expansion of sustainable construction activities in Worksop; and further grow world-leading green and nuclear clusters in Derby’s Infinity Park.

Alongside this, grant funding will be used to address low employment growth and a shortfall of individuals with skills above Level 3 through bespoke skills and retraining programmes, to enable more people to access the job opportunities the Investment Zone will create. Grants for R&D and business support will further help to commercialise innovative research and bring products to market.

Taken together, local partners expect these proposals to create 4,300 jobs and leverage around £380 million of private investment over the next 10 years. The East Midlands Investment Zone is supported by local businesses and research partners including the University of Derby, University of Nottingham, and Nottingham Trent University. 

For more information about the GreaterEast ManchesterMidlands Investment Zone, contact the East Midlands Combined County Authority

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The Greater Manchester Investment Zone will drive growth and innovation in the advanced manufacturing and materials sector. Key locations include:

• Innovation District Manchester
• Salford Crescent
• Atom Valley in Bury, Oldham and Rochdale

Funding will be used to accelerate the Innovation District Manchester, Salford Crescent, and Atom Valley developments, with support for research and innovation to grow the knowledge economy and infrastructure funding to unlock laboratory and manufacturing space.

Additional funding will be provided for opportunities outside these 3 developments to strengthen the wider innovation ecosystem, include a multi-million-pound revolving investment fund to provide debt and equity finance to local advanced manufacturing and materials businesses across the whole of Greater Manchester, and £5 million to support skills development. Taken together, local partners expect these proposals to create 32,000 jobs and leverage £1.1 billion investment over the next 10 years.

The Greater Manchester Investment Zone has chosen not to designate any tax sites.

The Greater Manchester Investment Zone is supported by University of Manchester, Manchester Metropolitan University, University of Salford, and University of Bolton.

For more information about the Greater Manchester Investment Zone, contact the Greater Manchester Combined Authority.

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The Liverpool City Region Investment Zone aims to position the area as a global lead in life sciences innovation and drive forward a high-wage, high-skill, and high-productivity economy. Key locations include:

• Knowledge Quarter Liverpool
• Sci-Tech Daresbury – tax reliefs available on designated site
• Maghull Health Park – tax reliefs available on designated site
• Speke Pharmaceutical Cluster
• St Helens Manufacturing and Innovation Campus – tax reliefs available on designated site

A combination of tax reliefs and funding will leverage private investment to develop new world-class facilities and capabilities at Knowledge Quarter Liverpool, Sci-Tech Daresbury, Maghull Health Park, Speke Pharmaceutical Cluster and St Helens Manufacturing and Innovation Campus, helping drive breakthrough research in infection, therapeutics, mental health, advanced manufacturing, and the use of data and AI to lead healthier lives.

Key investments are targeted in research and development, innovation infrastructure, skills and employment, business support and laboratory space. Initial investments will include £9.5 million to develop new category 2 lab and office space at Sci-Tech Daresbury, £10 million toward further enhancing the AI and robotics capabilities at iiCON to reduce the development time for infection therapeutics, as well as £2 million toward manufacturing equipment at TriRx, expanding the number of pharmaceuticals it delivers to a global market. Taken together, local partners expect the interventions to attract up to £640 million of private investment and create over 8,000 new jobs over the next 10 years.

The Liverpool City Region Investment Zone is supported by University of Liverpool.

For more information about the Liverpool City Region Investment Zone, contact the Liverpool City Region Combined Authority.

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The North East Investment Zone will support new investment and innovation in electric vehicle manufacturing, battery production, offshore wind and low-carbon materials, building on the region’s longstanding strengths in automotive and advanced manufacturing and increasing prominence as a hub for clean energy. Key locations include:

• Blyth Energy Central in Northumberland – tax reliefs available on designated site
• International Advanced Manufacturing Strategic Site in Sunderland and South Tyneside – tax reliefs available on designated site
• Tyne Powered Economic Corridor
• NETPark in County Durham

Tax reliefs and funding will be used to attract investment, stimulate innovation, and support businesses to grow in these sectors. Tax reliefs will be available at Blyth Energy Central in Northumberland and the International Advanced Manufacturing Strategic Site in Sunderland and South Tyneside, while a £20 million co-investment fund will unlock jobs growth along the Tyne Powered Economic Corridor and expand capacity at NETPark in County Durham. This will be complemented by £15 million for a skills package co-delivered with the private sector, as well as £15 million of infrastructure funding and £5 million to stimulate innovation and productivity growth across these sectors.

The programme aims to secure major inward investors, encourage co-location of wider supply chains and support the growth of existing businesses. Together, local partners expect these proposals to leverage at least £3 billion investment and create more than 4,000 jobs over the next 10 years.

The North East Investment Zone is supported by Newcastle University, Northumbria University, Durham University, and University of Sunderland.

For more information about the North East Investment Zone, contact Invest North East England.

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The South Yorkshire Investment Zone will drive investment and support scale up of businesses in the advanced manufacturing sector, building on the region’s established strengths and significant existing business base. Key locations include:

• Sheffield city centre
• Advanced Manufacturing Innovation District and Rotherham town centre
• Gateway East in Doncaster
• Opportunity sites in Doncaster and Barnsley

Funding will deliver a flexible and responsive Capital, Infrastructure and Feasibility Fund to overcome viability gaps and accelerate development of strategically important sites between Sheffield and Rotherham, as well as unlock investment opportunities on sites across Doncaster and Barnsley. This will include £10 million earmarked for 2 Co-Investment Funds to provide funding to early stage and scaling businesses.

Additional funding for infrastructure and research and innovation activities will unlock laboratory and spin-out space in Sheffield city centre, complemented by wider business support activities to support adoption of innovation and expand the benefits of the Advanced Manufacturing Innovation District. Investment at Gateway East will aim to accelerate development of the site and enable large manufacturing opportunities focused on decarbonising industries. Together, local partners expect these proposals to create more than 8000 jobs and leverage over £1.2 billion investment over the next 10 years.

The South Yorkshire Investment Zone has chosen not to designate any tax sites.

The South Yorkshire Investment Zone is supported by Sheffield Hallam University and University of Sheffield.

For more information about the South Yorkshire Investment Zone, contact the South Yorkshire Mayoral Combined Authority.

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The West Midlands Investment Zone builds on the region’s historic strengths in advanced manufacturing and will drive growth in battery, digital and sustainable construction technologies across 3 core sites. Key locations include:

• Birmingham city centre – tax reliefs available on designated site
• Coventry-Warwick Gigapark – tax reliefs available on designated site
• Green Innovation Corridor in Wolverhampton

Tax reliefs in Birmingham city centre will strengthen business partnerships with world-leading universities to create a multi-disciplinary innovation quarter with translational research and laboratory facilities. Tax reliefs will also be used in Coventry-Warwick to help to secure investment for a new battery gigafactory and stimulate clustering of associated businesses and technologies. Up to £40 million of funding is intended for infrastructure measures to improve travel and power connections in these sites as well as bring forward developments at the at the Green Innovation Corridor in Wolverhampton.

Alongside that, up to £19 million is being aimed at a package of support for business, research and innovation and skills will also grow the innovation ecosystem and skills base in the sector. Taken together, local partners expect these interventions to initially attract more than £2 billion of new investment into the regional economy and a further £3.5 billion over the lifetime of the investment zone, creating more than 30,000 jobs over the next 10 years.

The West Midlands Investment Zone is supported by Aston University, Birmingham City University, Coventry University, the University of Warwick, and the University of Wolverhampton.

For more information about the West Midlands Investment Zone, contact the West Midlands Combined Authority.

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The West Yorkshire Investment Zone will drive innovation and growth of HealthTech in the region, drawing on existing strengths in the life sciences and digital & technology sectors. Key locations include:

• Knowledge Quarter in Bradford
• Station to Stadium Corridor in Kirklees
• Innovation Arc in Leeds

Funding will deliver over £50 million of infrastructure investment to accelerate delivery of key initiatives including the development of digital technology innovation assets in the Bradford Knowledge Quarter, specialist clinical teaching and research facilities at the £250 million National Health Innovation Campus in Huddersfield, and refurbishment of the Old Medical School in Leeds to unlock 4,000 square metres of innovation space and create a life sciences and digital health science park.

With a further £25 million revenue funding, the Investment Zone will deliver a new regional accelerator and 3 place-based incubators, create a sector-specific skills offer and strengthen the innovation ecosystem by providing enhanced access to finance and business support to grow spin outs, start-ups and existing businesses. Together these proposals are expected to create over 7,000 jobs and leverage significant private investment over the next 10 years. The West Yorkshire Investment Zone has chosen not to designate any tax sites.

The West Yorkshire Investment Zone is supported by University of Bradford, University of Huddersfield, University of Leeds, and Leeds Beckett University.

For more information about the West Yorkshire Investment Zone, contact the West Yorkshire Combined Authority.

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Prospective Investment Zones

The government is working with local partners to develop and agree a further Investment Zone in Tees Valley.

The Tees Valley Investment Zone will focus on the digital technology and creative sectors across Hartlepool and Middlesbrough, with benefits for the wider region. Further details will be provided in due course.

What do Investment Zones offer?

Investment Zone areas will be provided with up to £160 million over 10 years to use on a range of interventions designed to attract investment, boost innovation and create jobs. As part of this offer, places were given the flexibility to choose between taking the full envelope as spending or using some of the envelope to offer tax reliefs on specific sites, depending on the barriers to investment in their area.

Investment Zone Accountable Bodies have worked with research institutions, businesses, and local partners to understand the specific constraints and opportunities in their area. The design of the specific package of support available in each Investment Zone reflects these local constraints and opportunities, including the decision on whether to offer tax reliefs on designated sites.

Tax sites

Tax reliefs are only available for eligible businesses within designated Investment Zone tax sites. Three of the established Investment Zones in England include designated tax sites in the following locations.

Liverpool City Region Investment Zone

• Sci-Tech Daresbury
• Maghull Health Park
• St Helens Manufacturing and Innovation Campus

Maps of Liverpool City Region Investment Zone tax sites

North East Investment Zone

• Blyth Energy Central
• International Advanced Manufacturing Strategic Site

Maps of North East Investment Zone tax sites

West Midlands Investment Zone

• Birmingham Knowledge Quarter
• Coventry-Warwick Gigapark

Maps of West Midlands Investment Zone tax sites

Tax reliefs

Within designated tax sites, eligible businesses will have access to a suite of tax reliefs including for Business Rates, Stamp Duty Land Tax (SDLT), Employer National Insurance Contributions (NICs), Enhanced Structures and Building Allowance, and Enhanced Capital Allowances. These are designed to incentivise new investment within the boundaries of Investment Zone tax sites and can only be claimed once the tax site has been designated. These tax reliefs will be available from the date the tax site is designated until 30 September 2034. Not all Investment Zones will include tax sites.

HMRC Investment Zones information pack (PDF,pack: 207 KB, 16 pages): guidance providing information on the tax measures for businesses interested in operating within a designated Investment Zone tax site.

• HMRC Investment Zones information pack (PDF, 1.14 MB, 16 pages)
• HMRC Investment Zones information pack (Welsh) (PDF, 1.15 MB, 16 pages)

Full business rates relief will be available to eligible new business within an Investment Zone tax site, and certain existing businesses where they expand. It will apply for 5 years from the point at which the beneficiary first receives relief and can be first claimed from the date tax site designation takes effect.

For information on claiming this relief within an Investment Zone special tax site please contact the relevant billing authority.

Stamp Duty Land Tax (SDLT) relief is available when buying any land or buildings in Investment Zone tax sites in England, subject to it being acquired and used for qualifying commercial purchases.

You can claim full relief from SDLT on the total purchase price if at least 90% of the purchase price is for qualifying land or buildings. If less than 90% of the purchase price is for qualifying land or buildings, you can claim relief on the portion of the SDLT for the land or buildings which qualify, so long as the price for the qualifying land or buildings is 10% or more of the total price. You can’t claim any relief if less than 10% of the total purchase price is for qualifying land or buildings.

Check if you can claim relief from Stamp Duty Land Tax when buying land or buildings in an Investment Zone special tax site

Employer National Insurance Contributions relief: eligible employers with a business premises in an Investment Zone tax site will be able to apply a zero rate of secondary Class 1 National Insurance contributions on the earnings of eligible new employees who are expected to spend 60% or more of their working time in the tax site. This rate can be applied on the earnings of all eligible new employees, up to £25,000 per year, for 36 months per employee.

Check if you can claim relief from employer Class 1 National Insurance contributions when you employ someone in an Investment Zone special tax site

Enhanced capital allowances are available for companies investing in qualifying new plant and machinery assets. This allowance is a 100% enhanced capital allowance (also known as a first-year allowance) for plant or machinery primarily for use in an Investment Zone tax site.

Check if you can claim the enhanced capital allowance relief in an Investment Zone special tax site

Enhanced structures and buildings allowances are available to firms constructing or renovating structures and buildings for non-residential use in an Investment Zone tax site. This allowance is based on the existing structures and buildings allowance but will give relief at a higher rate of 10% compared to the existing national rate of 3%. You can claim 10% of the Investment Zone qualifying expenditure each year if you meet all the required conditions, for up to 10 years from the allowance period start date.

Check if you can claim enhanced structures and buildings allowance relief in an Investment Zone special tax site

Additional support

Businesses, research institutions, and stakeholders could also benefit from a range of spending interventions designed to attract investment and unlock barriers that are holding back growth in each Investment Zone. This support is aligned to 5 themes:

• skills
• research and innovation
• business and stakeholder support
• local infrastructure
• planning

The support available in each Investment Zone reflects local needs, constraints and opportunities in the priority sectors.

Skills

Where offered, business could benefit from specialist sector-focussed skills programmes to improve skills provision and the overall levels of skills within the target sector(s). This could include sector-specific bootcamps, funding for apprenticeships, and improved join-up of apprenticeships across providers and businesses.

Research and innovation

Where offered, business and research institutions could benefit from support to bring products to market, for commercialisation, improving uptake of new technologies, streamlining processes, and supporting innovation. This could include research and development grants to sponsor sectoral networks, investing in lab space and equipment, and support for PhDs.

Business and stakeholder support

Where offered, business and stakeholders could benefit from sector-specific support, additional and complementary to the existing local and national offer, to leverage local research strengths and facilities. This could include both research and development interventions and business support interventions.

Local infrastructure

Where offered, investment will help to deliver new or improved infrastructure linked to specific business investment opportunities or to unlock specific sites. This could include public transport, highways access, active travel infrastructure, or digital infrastructure. This may also include site remediation and enabling works where it will contribute to making a site ready for investment.

Planning

Effective and efficient planning is a key enabler of development and infrastructure and will help to deliver the space businesses need to establish, locate, or grow.

All Investment Zones provide a single point of contact for planning matters to help guide potential investors through the planning process and encourage local planning authorities to look to best-practice and innovative approaches where they would add value. This could include the use of Planning Performance Agreements, the implementation of masterplans, consideration of Investment Zone sites in local planning policy, and the use of Local Development Orders where these are expected to support future investment. This could also include consideration of infrastructure, remediation, or site-enabling needs.

Business rates retention

Where an Investment Zone business rates retention site is designated, the relevant billing authority will be able to retain 100% of the business rates growth above an agreed baseline. This will be guaranteed for 25 years, giving councils the certainty they need to borrow and to invest to support growth aligned to their Investment Zone.

Investment Opportunity Fund

At Autumn Statement 2023, the Chancellor announced the government’s intention to establish a new Investment Opportunity Fund available over 5 years to secure specific, named private investment in Investment Zones and Freeports across the country. ​

Further detail of the fund’s objectives, parameters, the broad criteria that the government will consider when identifying potential opportunities, and the next steps for delivery are set out in the Investment Opportunity Fund prospectus.

Subsidy control

The Secretary of State has made the English Investment Zones Subsidy Scheme (“the Scheme”) in compliance with the Subsidy Control Act (2022). The Scheme may be used by MHCLG, HMRC and other relevant public authorities for the purpose of providing targeted subsidies in English Investment Zone areas from commence of the Scheme to 5 April 2035. 

The Scheme encompasses 6 support measures. Guidance setting out the terms and eligibility conditions for each measure can be found below:

• Grant measures for local infrastructure, research and innovation, skills, and business support interventions
• Investment Zones business rates relief scheme guidance for local authorities 
• HMRC guidance on claiming National Insurance relief in Freeport or Investment Zone tax sites 
• HMRC guidance on claiming Stamp Duty Land Tax relief in Freeport or Investment Zone tax sites 
• HMRC guidance on claiming Enhanced Structures and Buildings Allowance relief in Freeport or Investment Zone tax sites 
• HMRC guidance on claiming Enhanced Capital Allowance relief in Freeport or Investment Zone tax sites

Key documents

• Investment Zones policy prospectus

• Investment Zones place selection: methodology note

• Investment Zones: technical document

• Investment Opportunity Fund: prospectus

Investment Zones in Scotland, Wales, and Northern Ireland

Investment Zones are a UK-wide policy and the UK government has committed to Investment Zones in England, Scotland, Wales, and an Enhanced Investment Zone in Northern Ireland. The UK government is working with the devolved administrations to deliver effective investment and maximise benefits for citizens, businesses and communities in Scotland, Wales and Northern Ireland.

Investment Zones in Scotland, Wales and Northern Ireland are being delivered to different timelines than in England and are being co-developed with the devolved administrations.

Scotland

The following Investment Zones in Scotland have been announced and are subject to ongoing co-development.

• Glasgow City Region Investment Zone
• North East (Scotland) Investment Zone

Investment Zones place selection in Scotland

Investment Zones in Scotland: technical document

Further details on the Scottish Government’s proposals will be provided in due course.

Wales

The following Investment Zones in Wales have been announced and are subject to ongoing co-development.

• Cardiff and Newport Investment Zone
• Wrexham and Flintshire Investment Zone

Investment Zones place selection in Wales

Further details on the Welsh Government’s proposals will be provided in due course.

Northern Ireland

In the Safeguarding the Union command paper, the UK government announced it will support Northern Ireland to capitalise on its unique opportunities by providing £150 million to develop an Enhanced Investment Zone. The funding will be able to be used flexibly across spending and tax levers.

Further details are set out in the Northern Ireland Enhanced Investment Zone policy prospectus.

Contact us

For general information on the Investment Zones programme contact the Ministry of Housing, Communities and Local Government at InvestmentZonesEnquiries@communities.gov.uklgdu@communities.gov.uk.

For practical guidance and insights to help you successfully set up in an Investment Zone visit the UK Investment Zones website or contact the Department for Business and Trade at Investment.Zones@businessandtrade.gov.uk.

For further detail on a specific Investment Zone please contact the relevant Accountable Body (Combined Authority) as set out above.

For further guidance on specific tax reliefs please contact HM Revenue & Customs at InvestmentZonesProgramme@hmrc.gov.uk.