Working with Social Enterprises

iforchange worked with a social enterprise that needed a loan to lease and refit a property that they could operate in. HMRC gave us advanced assurance in May 2015 that the loan will be eligible for the social investment tax relief.

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).

This is just a simplified summary; please contact us if you are looking for actual advice.

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.