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

Charities who ignore 'no cold callers' signs are not in breach of Iof Code of Practice, says FRSB

29 Jan 2015

Doorstep fundraisers can ignore “no cold callers” signs without breaching the Code of Fundraising...

Macmillan Coffee Morning raises record breaking £25m

29 Jan 2015

Macmillan’s flagship fundraising event, the World's Biggest Coffee Morning, has beaten its previous...

BP donations to Tate 'embarrassingly small' say campaigners

27 Jan 2015

An arts charity has criticised the Tate for accepting an “embarrassingly small” amount of money from...

Shawcross reappointed as chair of the Charity Commission

29 Jan 2015

Francis Maude, minister for the Cabinet Office, has reappointed William Shawcross as chair of Charity...

Commission shows ‘real improvement’ but many concerns remain, says Public Accounts Committee

29 Jan 2015

The Charity Commission has been praised by Margaret Hodge, chair of the Public Accounts Committee, for...

Commission to investigate charitable school over private benefit from leisure centre and dating agency

29 Jan 2015

The Charity Commission is set to open a statutory inquiry into Durand Education Trust, a charity connected...

NGO domain pages will launch in May

28 Jan 2015

The Public Interest Registry will make the .ngo generic top-level domain name generally available from...

Comparison website for special needs services launched by charity consortium

23 Jan 2015

A coalition of social care charities has launched a TripAdvisor-style website, designed to help families...

CRUK debuts contactless giving through shop windows

21 Jan 2015

Cancer Research UK has announced a collaboration with outdoor media owner Clear Channel to bring contactless...

Join the discussion

 Twitter button

@CSFinance