Investing in social enterprise

February 24, 2014

Investing in social enterprise

Investing in social enterprise

UK government publishes policy roadmap

Last month the UK government published its Social Investment Roadmap, setting out plans to extend support in the tax system for the ways that people can invest in social enterprise – a business that trades for a social good or purpose – in 2014.

The roadmap builds on a formal consultation on social investment tax relief, published in summer 2013 and draft legislation published in December 2013. It sets out the government’s plans to:

  • seek approval from the European Commission to introduce a larger scheme
  • expand the options for indirect investment
  • establish a government-run accreditation scheme for Social Impact Bonds eligible for social investment tax relief
  • make changes to community interest companies’ regulations
  • promote the scheme to investors and social enterprises

Research from the Big Society Capital has found that the relief, which will from April give an income tax deduction to investors, could unleash up to £500 million of extra investment over the next five years.

The government has already announced that the social investment tax relief will be available for private investment in charities, community interest companies and community benefit societies, and in social impact bonds where the special purpose vehicle is a company limited by shares.

The government will announce the rate and the maximum amount of investment eligible per organisation at Budget. So far, it has already been announced that organisations with 500 or fewer employees will be eligible for the relief.

Read the Social Investment Roadmap in full.

(photograph: Alamy)


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