Social Investment Tax Relief

The Finance Act 2014 brought in a tax relief for individual investors investing money in certain types of charity and social enterprise. It offers investors various potential tax benefits, but the one most likely to drive take up of investments is income tax relief. Subject to certain limitations, for each £100 invested in an eligible investment, an individual could receive £30 off their tax bill (it does require people to have income tax due against which it can be offset, however, and there are some extra forms to fill in).

So what does this mean for organisations looking to raise investment? There are certain eligibility hurdles: you must have the right legal form, the investment being offered must be of an eligible type, and, where the investment is a social impact bond, there may need to be a certification, and there are some detailed rules about how much money you can raise that is eligible for this tax relief.

Where the investment being offered is shares (for example for social enterprises organised as CICs, community benefit societies, or for social impact bonds utilising certain legal forms), it may make more sense to offer the investment under the terms of the Seed Enterprise Investment Scheme, as the tax reliefs are even more generous here.

The amount that can be raised under the Social Investment Tax Relief is currently constrained by a formula that is related to the “de minimis” state aid rules, as well as certain tax rates.


If you are considering raising social investment, why not contact us? We'll be happy to talk to you about your options and whether we think a social investment tax relief eligible investment would be the right way to go. If they are, then we can offer a variety of services connected with social investment: business and financial modelling, structuring the investment opportunity, obtaining approval from HMRC, and finding investors.

Learn more about the Social Investment Tax Relief.