From 6 April 2017, the amount of investment social enterprises aged up to 7 years old can raise through Social Investment Tax Relief (SITR) will increase to £1.5 million. Other changes will be made to ensure that the scheme is well targeted. Certain activities, including asset leasing and on-lending, will be excluded. Investment in nursing homes and residential care homes will be excluded initially, however the government intends to introduce an accreditation system to allow such investment to qualify for SITR in the future. The limit on full-time equivalent employees will be reduced to 250. The government has said that it will undertake a review of SITR within two years of its enlargement.
The Treasury has announced that draft clauses and explanatory notes giving further detail on the changes will be published in the new year.
Luke Fletcher, Head of BWB’s Social Ventures and Social Finance team, comments: “This is a welcome expansion of the amount that social enterprises, including charities, CICs and community benefit societies, can raise using SITR. Whilst it had been hoped that this figure would rise to £5 million, the new level of £1.5 million is still welcome news and should help more social enterprises make use of the relief and promote the growth of SITR qualifying investments. New exclusions for asset leasing, on-lending and social care seem designed to iron out some wrinkles in the legislation and to ensure that the relief is better focused on providing genuine risk capital to social enterprises. We will continue to work with clients making use of the relief and hope there might yet be scope for further expansion in future.”
If you have any questions please contact the social finance team.
Partner & Head of BWB Compliance
- +44(0)20 7551 7876
Posted on 25/11/2016 in Legal UpdatesBack to Knowledge