Over 30,000 social enterprises and charities could benefit from Social Investment Tax Relief (SITR), suggesting vast untapped potential, according to research undertaken by Big Society Capital, and backed by the Department for Culture, Media and Sport.
Big Society Capital has responded to the Government’s call for evidence on SITR. Based on extensive research and feedback from social enterprises, charities and other key stakeholders, the organisation is calling on the Government to make essential changes to the tax relief, including:
- Expand eligible activities to include the hire of assets on a short-term basis (for example, one month or less).
- Expanding eligible activities to include community-owned renewables and refinancing
- Increasing the lifetime limit to £5 million
- Eliminate the restriction on organisations over 7 years old applying
Cliff Prior, CEO of Big Society Capital, commented:
"Social enterprises and charities are a key part of the social fabric of the UK, helping people in disadvantage in every town and city in the country. We believe that SITR has the potential to bring about great change in our society by helping organisations get the investment they need to tackle some of our most pressing issues. It fills a critical gap in financing for them and has already raised over £11.6 million to grow their impact. Importantly, SITR also enables more people to invest in line with their values, often within their own community.
In order for the full potential of the tax relief to be achieved, it’s crucial that the Government makes the necessary changes to expand both the reach of SITR and its ease of use. We believe the current model is based too closely on other, more commercial tax reliefs, such as the Enterprise Investment Scheme. The key difference is the need not only to support start-ups, but to level the playing field, as social enterprises and charities find it harder to access finance than their commercial counterparts.
SITR presents another chance for the UK to be a world leader in the social impact investment space, a world leader in investing for good and improving lives and communities. We look forward to working with the Government and the industry to develop a version of SITR that can help more social enterprises and charities achieve greater levels of positive social impact."
Big Society Capital’s full response to the consultation can be found here.