A scheme designed specifically to support the growth of social enterprises and charities through private investment is in danger of being scrapped.
Social Investment Tax Relief (SITR) is “a vital support scheme” for social enterprises and charities that are working hard to improve vulnerable people’s lives in communities across the country.
Resonance founder Daniel Brewer said: “This support is particularly urgent now as social enterprises are playing an important role in our country’s recovery from the Covid-19 pandemic.”
Resonance, who have offices in Bristol on Redcliff Street, are one of the UK’s leading social impact investment companies.
Brewer added: “SITR has enabled many outstanding and crucial social enterprises to access the investment they need to grow on an unsecured and affordable basis.
“These organisations have been able to use this investment to grow their business and their social impact – ranging from supporting vulnerable groups back into work, to offering opportunities to young people facing exclusion from school.
“The majority of these organisations would not have been able to secure this support had it not been for SITR.”
Due to a sunset clause in the legislation, however, SITR will be retired by April 2021 unless action is taken now to extend it.
There is an opportunity to extend the tax relief through an amendment in the Finance Bill currently passing through Parliament, with Brewer urging people across the UK to write to their MP to ask them to support such an amendment which would extend SITR’s end date from April 2021 to April 2023.
“We also believe SITR could be a significant force for good as the UK emerges from this current crisis especially if it was allowed to include investing in community renewables, care homes and community facilities (as it was when first launched) but for now we just need to ensure the relief doesn’t disappear,” Brewer said.
“Therefore if the sunset clause amendment isn’t passed the result will be that very soon, millions of pounds of investment capital that can be raised for social enterprises supporting the most vulnerable in society will not be able to be used.
“At Resonance we welcome any review of tax reliefs, but to remove the one that benefits the most vulnerable and disadvantaged, without any replacement in place, would be incredibly damaging – both directly to social enterprises and the people they support, and also through its clear message that ‘the social sector doesn’t matter’ to Government.
“This would be particularly detrimental at a time when social enterprises and charities are on the frontline, with staff and volunteers risking their own lives to help others through the Covid-19 pandemic – and for a Government that is looking to demonstrate its commitment to ‘levelling up’ for disadvantaged communities.”
Main photo: Raised in Bristol
Read more: The rise of alternative finance