Share

CITR will be included in cap on tax relief, confirms Treasury

CITR will be included in cap on tax relief, confirms Treasury
News

CITR will be included in cap on tax relief, confirms Treasury

Finance | Vibeka Mair | 20 Apr 2012

Treasury has confirmed that community interest tax relief (CITR) will be included in its proposed cap on tax relief.

NCVO has warned this could cause "untold damage" to the social investment market, while Big Society Capital chief executive Nick O'Donohoe says it is not hugely relevant as CITR is not an effective tool to stimulate social investment in its current form anyway.

The CITR scheme encourages investment in disadvantaged communities by giving tax relief of 25 per cent over five years to investors who invest in community development finance institutions, which provide loans to businesses and social enterprises.

This week Treasury confirmed that CITR will be included its proposed cap on tax relief.

Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, said: "The cap on tax relief is already damaging philanthropy. The confirmation from the Treasury that measures relating to social investment will also be included in the cap could do untold damage to the emerging social investment market. This runs contrary to the establishment of Big Society Capital and all of the government's aspirations to promote social enterprise."

However, Nick O'Donohoe, chief executive of Big Society Capital, told civilsociety.co.uk that he was not especially worried about it.

"It is used very narrowly," he said. "I don't think it is hugely relevant. CITR has a lot of different issues that need to be addressed for it to be effective and stimulate social investment.

"The debate around the charitable cap on donations is a much bigger issue and hugely relevant. But including CITR as a part of that is not a huge difference."

Before last month's Budget the sector had called for CITR to be reformed to allow indirect investments via community development finance institutions to charities and social enterprise, to be eligible for CITR. However, the only mention of social investment in the Budget was an internal review within Treasury on the barriers to social enterprise.

Nigel Kershaw, chief executive of Big Issue Invest, said the announcement from the Treasury this week sends out a "confusing message" from government: "CITR is the only tax relief in the social investment sector. We need to expand it or have a review," he said.

A spokesman from the Community Development Finance Association said it could not give a definitive response as the Treasury had said that the exact terms and conditions of how the cap will apply will not be sorted out until summer.

"But in principle we are not happy," he said. "We are perplexed and surprised that CITR has been captured within this charitable giving tax relief cap. CITR is categorically different to philanthropic giving to charity. It's an investment which investors get back after five years, not a donation, and therefore should not be subject to the same rules."

The proposed cap will limit the amount of tax relief individuals can claim to a quarter of their income or £50,000, whichever is higher. 

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

Falling rag prices likely to cost charities tens of millions

1 Sep 2014

Charities are likely to lose tens of millions of pounds this year from a fall in the price of recycled...

Over 145 charities receive donations from #icebucketchallenge through JustGiving

1 Sep 2014

Over 145 individual charities have benefited from donations made as a result of the ice bucket challenge,...

Supermarkets donate profits from #icebucketchallenge to MND Association

29 Aug 2014

Tesco has announced that it will donate the profits made from an increase in sales of ice to the Motor...

Changemakers becomes part of Foyer Federation

1 Sep 2014

Youth charity Changemakers has merged into the Foyer Federation to scale-up its youth leadership projects,...

Sky News anchor accuses Barnardo's chief of fence-sitting over Rotherham scandal

1 Sep 2014

Barnardo’s chief executive Javed Khan refused to call for the resignation of South Yorkshire Police...

Former Awema chief executive cleared of two counts of fraud

1 Sep 2014

The former chief executive of the Welsh race relations charity, Awema, was cleared of two counts of fraud...

Over 145 charities receive donations from #icebucketchallenge through JustGiving

1 Sep 2014

Over 145 individual charities have benefited from donations made as a result of the ice bucket challenge,...

EU data protection proposals would kill fundraisers’ mailing lists, says report

28 Aug 2014

Proposed EU data protection rules could destroy mailing lists relied on by charity fundraisers, and would...

Macmillan: We did not hijack #icebucketchallenge

21 Aug 2014

Macmillan has hit back against accusations on social media that it has hijacked #icebucketchallenge, saying...

Join the discussion

 Twitter button

@CSFinance