Campaigners call for extension to UK Government’s Social Investment Tax Relief.
Social enterprises could face a “hammer blow” if the UK Government scraps a tax relief scheme, campaigners are warning.
Social Investment Tax Relief (SITR) has unlocked over £14 million in private investment since it was introduced in 2014, helping more than 75 social enterprises and community projects deliver essential services across the UK.
The only tax break specifically aimed at social enterprises, SITR encourages investment in good causes by giving investors a 30% income tax relief when they buy shares in, or lend money to a social enterprise.
However, after a planned review into the impact of SITR was dropped due to the coronavirus outbreak, the scheme is set to be scrapped in April 2021 unless ministers amend the finance bill currently going through Westminster.
Campaigners including social investment firm Big Society Capital are now urging the government to commit to a two-year extension for SITR as social enterprises and community projects struggle with the impact of the pandemic.
“The very social fabric of our country is being tested by Covid-19 and social enterprises are on the frontline responding to the crisis, including supporting the most vulnerable in communities by delivering food and medicine and tackling domestic violence. They will also be on the frontline of making things better in the aftermath,” said Stephen Muers, interim chief executive at Big Society Capital.
He added: “Now is not the time to be taking away a tax relief scheme that has been proven to attract significant investment into some of the most disadvantaged places and causes in the UK and this is why we urge MPs to act quickly to prevent the closure of what is a valuable lifeline for the sector, saving potentially hundreds of jobs and key community services in the process.”
Big Society has written to financial secretary to the treasury Jesse Norman urging him to extend the scheme. The letter has been signed by 33 of the UK’s leading social investors and third sector support organisations, including the chief executives of Triodos Bank UK, Charity Bank and Big Issue Invest.
Mr Muers said: “Social enterprises are backing our rallying call and now we need the MPs to step forward and play their role to ensure we don’t have to hand back millions of pounds of private money to individuals who want to support projects and organisations that are helping others in the heart of their communities.”