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Social Investment Tax Relief (SITR) can be used by eligible social enterprises, charities & community businesses to raise new investment to support your trading services.  It could provide routes to investment which offer better value and could potentially be less costly than other sources of investment.

"SITR for us has been incredible. I don't know that Second Shot would have been able to get off the ground without it."

Julius Ibrahim, Founder, Second Shot Coffee

Watch Second Shot Coffee's SITR story
More SITR in action
What type of capital can SITR raise?
Unsecured
Unsecured
loan or equity
Negotiate terms
Flexible
Negotiate terms acceptable with your investors
Calendar
Patient
Window of 3 years and 1 day before repayments start on the capital borrowed
Umbrella
Risk is offset
Cost of finance subsidised with a 30% tax relief for investors
How does SITR work?

The step-by-step process for using Social Investment Tax Relief to raise investment for your organisation.

Before raising SITR investment
1. Eligibility
  • Only organisations with certain legal structures are eligible
  • Some trading activities don't qualify for SITR
Find out if you can use SITR
2. Investor research

Possible investment sources

  • SITR fund
  • Crowdfunding / Community shares
  • Individual investors (minimum 4 or with no more than 30% of the debt)
More on raising investment

Investment size, type & terms

  • Amount of debt or equity
  • Term of investment: duration and interest
More on investment types
3. Apply for Advance Assurance with HMRC
  • Not compulsory but it is highly advisable
  • The process currently takes between six and 14 weeks for a response so do make sure you build it into your timetable
Help with Advance Assurance
4. Investment preparation
  • Secure investor source(s)
  • Complete legal documentation (investment proposal and loan agreement)
  • Agree date for transfer of funds with investors
  • Agree date for commencement of loan contract

You can find example loan agreements under the relevant type of SITR investment.

SITR investment
After raising SITR investment
5. Investment

Ensure that all money has been transferred in advance of start date of the loan contract to ensure no investor holds more than 30% of the debt

6. SITR compliance

Compliance statement

  • This is a form setting out the details of the investment and the investors, which you can access from HMRC's website
  • It needs to be submitted to HMRC each time a new investment is made
  • Earliest date for submission: trading activity funded through SITR must have begun and been sustained for at least 4 months
  • Latest date for submission: no later than 2 years after the end of the tax year in which the investment was made

Certificate

  • Must be issued to each investor so that they may claim the relief
7. Repayment of debt
  • Minimum of 3 years and 1 day capital holiday
  • If applicable, interest can be paid throughout the loan period
Question
Can I use SITR?
Pound
How much can I raise?
raise investment
How do I raise investment?
money-pie-chart
Can I use more than one tax relief?
More case studies
FC United of Manchester
The Freedom Bakery
Type of investment
Loan / Direct
Investment amount
£48,000
Duration of investment
4 years
Cost of capital
1.75%
More
Aspire Gloucestershire
Aspire Gloucestershire
Type of investment
Social Impact Bond / Direct via advisers
Investment amount
£50,000
Duration of investment
3 years
Cost of capital
7%
More
BS3 Community (Southville Community Development Association)
BS3 Community
Type of investment
Social Impact Bond / Crowdfunding
Investment amount
£560,000
Duration of investment
6 years
Cost of capital
4%
More
Our Power
Our Power
Type of investment
Loan / Crowdfunding
Investment amount
£1,460,000
Duration of investment
3 years (min)
Cost of capital
6.5%
South Bristol Sports Centre
South Bristol Sports Centre
Type of investment
Loan / Fund
Investment amount
£250,000
Duration of investment
6 years
More
Portpatrick Harbour
Portpatrick Harbour
Type of investment
Equity / Direct
Investment amount
£100,000
Duration of investment
5 years
Cost of capital
1.5%
More
Burley Gate Community Shop
Burley Gate Community Shop
Type of investment
Loan / Direct
Investment amount
£57,000
Duration of investment
4 years for loans
Cost of capital
Between 2-3%
More
Clevedon Pier
Clevedon Pier
Type of investment
Equity / Direct
Investment amount
£250,000
Cost of capital
2%
More
The Spotted Cow
The Spotted Cow
Type of investment
Equity / Crowdfunding
Investment amount
£277,000
Duration of investment
3 years (min)
Cost of capital
3%
More
Ambition East Midlands
Ambition East Midlands
Type of investment
Social Impact Bond / Direct via advisers
Investment amount
£100,000
Duration of investment
3 years
Cost of capital
7%
More
FC United of Manchester
FC United of Manchester
Type of investment
Loan / Direct
Investment amount
£270,000
Duration of investment
4 years
Cost of capital
2% (optional)
More
Fareshare South West
Fareshare South West
Type of investment
Loan / Fund
Investment amount
£70,000
Duration of investment
5 years
Cost of capital
5% for first 36 months, 7% for remaining 24 months
More
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