Extending social Investment tax relief

Thu 04 Dec 2014

Subject to EU approval the Government intends to increase the investment limits for SITR and widen the range of qualifying vehicles, such as small-scale community farms and horticultural entities.

The provisions will affect social enterprises: businesses set up to carry out business activities and specific projects on a not-for profit basis.

In its present form SITR is available in for investments in social enterprises made in the period 6 April 2014 to 5 April 2019. The limit on the aggregate investments in any one SE that may attract SITR is €344,827.  Individuals may claim SITR of up to £1m p.a. on investments in SEs.

The Government intends to widen the scope of SITR by both increasing the limits and making additional vehicles qualify, but this will not take effect until next year. A consultation to introduce a Social Venture Capital Trust to enable collective investments will start early next year. Whilst there is no guarantee that the EU will approve what the Government eventually comes up with this is a very encouraging development. Many social enterprises must have wondered if the cost and hassle of obtaining relief was justified within the current limits.

#AS2014 Green shoots or Brussels sprouts? Social enterprises to benefit from major enhancements if UK Gov gets EU approval.