HMRC Freeports Compliance Guide 2025 Explained

On September 25, 2025, the HMRC published its latest version of the Guidelines for Compliance (GfC), which includes HMRC’s interpretation of complex, widely misunderstood, or novel risks that can occur across tax regimes, including VAT, transfer pricing, customs, and excise duties. As part of the updates, the HMRC also released the newest version of GfC14, which sets out the tax reliefs and customs benefits of Freeports.

Impact on Freeport Tax Compliance

Updated GfC14 serves to help businesses and their advisers understand HMRC’s position on how to reduce the risk of non-compliance when operating within Freeports. The compliance documents focus on and explain two main types of areas within Freeports. The first one refers to special tax sites, whereas the second relates to customs sites, also known as free zones.

As stated in the GfC14, VAT and customs reliefs are available exclusively in customs sites. However, to benefit from these reliefs, businesses must meet qualifying conditions, such as obtaining HMRC authorization and operating within a designated Freeport customs site, having a provisional agreement with the site operator where the goods will be stored or processed, providing complete details of the goods in the application, and a few others.

Furthermore, goods stored in the Freeport customs site also benefit from the suspension of several key liabilities, including import duty, import VAT, and any additional charges resulting from policy measures such as anti-dumping, countervailing, or safeguarding duties. Even if goods are transferred between different Freeport customs sites under the same procedure, they remain under duty suspension throughout the movement. Nevertheless, if goods are later declared for free circulation in the UK, the charges become payable. 

Conclusion

Businesses involved in activities related to Freeports should review the published and updated guidelines, as they highlight HMRC’s ongoing commitment to promoting clarity and compliance within the UK’s Freeport framework. With proper authorisation, accurate recordkeeping, and transparent operations, taxable persons will not encounter any non-compliance issues.

Source: HMRC - Help with Freeports — GfC14, HMRC - Tax reliefs (part 2), HMRC - Customs and Excise benefits (part 3)