Community Investment
Social enterprises stand to benefit from changes to the rules around Community Investment Tax Relief (CITR).
The Chancellor announced a change that allows funds raised under CITR to be used more flexibly by Community Development Finance Institutions (CDFIs). This will benefit not only the CDFIs themselves (many of whom are social enterprises), but also those organisations that borrow from CDFIs (many of whom are social enterprises).
The Chancellor announced a change to the operation of the tax incentives for investors in disadvantaged communities via CDFIs. The change will allow CDFIs to keep an average of 75% of their fund onward invested, instead of a minimum of 75% – providing better flexibility in the way they manage their loan books.
These changes are a part of the ongoing review of the operation of CITR, announced in last November's social enterprise action plan. The Office of the Third Sector will continue to build the evidence on access to finance for social enterprises, to establish whether there are inefficiencies in the market that could be addressed.