If your business is investing in capital — new sites, plant, or hiring — and is located in (or could locate in) a designated zone, Investment Zones and Freeports can materially cut costs. They aren’t AI grants, but they can support AI/tech investment. Here’s how in 2026, cited to gov.uk. (dgm implements osFoundry as an independent partner.)
What they are
Investment Zones (now framed under the Industrial Strategy as “Industrial Strategy Zones”) and Freeports are geographically designated economic zones offering targeted tax reliefs, capital funding and planning/business support to attract high-value investment. Several target digital, AI and advanced-manufacturing clusters.
The tax reliefs
In designated special tax sites, the reliefs are significant (gov.uk):
| Relief | Detail |
|---|---|
| Secondary Class 1 NICs | Zero on eligible new employees (≥60% time in-site); extended to 30 Sep 2034 |
| Capital allowances | 100% first-year on qualifying plant & machinery |
| Structures & Buildings Allowance | Enhanced 10% (vs 3% nationally) |
| SDLT | Full relief on qualifying commercial land/buildings |
| Business rates | Full relief for eligible new/expanding businesses |
Investment Zones also get £160m over 10 years (tax reliefs plus funding) per zone area.
The catch: it’s location-conditional
These benefits are conditional on physically operating within a designated tax site — you can’t claim them remotely. So this is not a grant to buy AI software; it lowers the cost of capital investment and hiring in-zone. For an AI/tech business that’s expanding, building a data centre or advanced-manufacturing facility, or hiring within a zone, the reliefs can be valuable. For a business simply adopting an AI tool from its existing office, they’re irrelevant.
HMRC maintains an Investment Zones information pack and a Freeports list.
How to use this
If you’re making a capital and hiring decision anyway, check whether a designated zone fits your plans — the NICs and capital-allowance reliefs can change the economics of building AI/compute infrastructure or scaling a team. Treat it as a tax/location optimisation, handled with your accountant, layered on top of your AI project rather than as AI funding itself.
Where osFoundry and dgm fit
Whether or not you’re in a zone, the AI build is the same. dgm scopes and implements AI projects on osFoundry: usage-priced, bring-your-own-key, with local and self-hosted inference options — which means you don’t need heavy in-zone compute capital to start, though you can run your own infrastructure if you choose. For UK data-sensitive work we’d use an EU region or self-hosted deployment (osFoundry publishes US/EU/JP regions, not a UK one).
dgm is an independent integration partner with zero integrations so far. The zone reliefs are a tax matter for your accountant. To scope an AI project, book a consultation with dgm. General information, not tax advice.