Just when you thought that there was no news other than Covid-19 something comes along that sneaks under the radar. I’m indebted to David Alcock at Anthony Collins Solicitors for flagging this up in his LinkedIn feed — I would have missed it otherwise.
If passed into law, The Finance Bill, currently in the Committee stage in the House of Commons, could result in the removal of Social Investment Tax Relief (SITR). A recent article in The Guardian explains this.
SITR is the only tax break specifically aimed at social enterprises. It enables investors to receive 30% income tax relief on the shares they buy or the money they lend to social enterprises. Its introduction in 2014 was intended to stimulate the social investment marketplace and increase the range and number of investors willing to put money into social ventures, but the legislation at that time also included a clause that would bring the scheme to an end in April 2021.
It is true that to date SITR has been under-utilised and has not produced the level of investment originally predicted, but this must be qualified by saying that SITR is over-complicated, little understood, ineffectively marketed and subject to extremely low public awareness.
For some time now, Big Society Capital has been campaigning for the Treasury to clarify its position on SITR and in a letter to the Treasury signed by 33 of the UK’s leading social investors and third sector organisations is urging reform and extension of the scheme.
SITR may need reform and improvement, but now is surely not the time to scrap legislation that can help get money into social enterprises and other social purpose organisations.
If you feel strongly about this you can use the very simple Write to Them website to identify your MP and compose and send a letter. Once written, you get an automated email confirmation notice that enables you to authenticate the letter; it is then sent via the website, and each letter is assigned an electronic signature further authenticating it. WriteToThem is independent and is run by the charity mySociety.