Community Investment Tax Relief is to be retained, said the Chancellor in
his Budget announcement yesterday.
Community Investment Tax Relief (CITR) is an incentive offered to investors in accredited community development finance institutions. These institutions lend and invest in deprived areas and in markets that are considered risky by mainstream banks.
Although the scheme has been very beneficial to communities around the country, the Office of Tax Simplification had recommended it be scrapped - something many in the sector reacted angrily to.
Stephen Bubb, chief executive of Acevo, was one of them. He wrote to the Chancellor earlier this month to say that to close the scheme would "not just remove an incentive for social investment, it would send a terrible message to third sector organisations and investors that the Government is not serious about investment into the sector or enabling social sector organisations to deliver public services and build the Big Society."
News that the CITR will not face the axe has therefore been widely welcomed.
"It is encouraging that the Government is committed to retaining and promoting Community Interest Tax Relief; this helps to stimulate the social investment market and encourages investment in deprived communities," said Stuart Etherington, chief executive of the NCVO.
"The protection of Community Investment Tax Relief is arguably the greatest success for the social enterprise community," added Ceri Jones, Head of Policy at the Social Enterprise Coalition. "Our movement has been campaigning hard for this and we hope the scheme will be given greater support and promotion in the future. The Government and the social enterprise community now need to make design changes to the scheme so that it maximises its impact supporting business in deprived communities."
The full Budget report can be read here
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