Social Investment Tax Relief (SITR) is the only tax incentive of its kind to encourage private investment in social enterprise and community business.
Due to a sunset clause in the legislation, SITR is due to end on 5th April 2021. This means that community groups raising share offers will no longer be able to benefit from tax relief on investments made after that date.
In 2020 alone, we saw £4.5m raised in share offers to support new community businesses opening. Since 2012, £155m has been raised by 104,203 people to support more than 440 businesses. According to Big Society Capital, £14.5 million has been raised through SITR.
Enquiries to Plunkett about setting up a new community business saw a large increase in 2020 – 53% more than in 2019. If the Government does not renew SITR, these new community businesses may struggle to attract larger investments.
At a time when community businesses are doing so much to support their communities during the pandemic – making deliveries, setting up emergency shops, and checking in on neighbours – the Government needs to be stepping up their support, not dropping vital tax relief.
Along with Co-operatives UK and Social Enterprise UK, Plunkett Foundation is calling for SITR to be renewed. We have written to Jesse Norman, Secretary to the Treasury, to ask for the extension of SITR so that the community business sector can continue to grow and thrive. Read our letter here.
There’s still time to save SITR before a decision is announced in the next budget on 3rd March 2021.
You can write to your MP and tell them how SITR has benefitted you as a business or an investor or you can sign the joint letter to the Chancellor to ask him to extend and expand the Social Investment Tax Relief.
Have you benefitted from SITR? Tweet your story to @PlunkettFoundat using the hashtag #SaveSITR.
Georgina Edwards, Information Hub Manager