The Community Development Finance Association (CDFA) is leading a campaign to encourage the government to extend the community investment tax relief (CITR) scheme which is due to end in 2012.

The government uses CITR as a tax incentive for investors into community development finance institutions (CDFIs) – financial organisations which invest in enterprises that operate within or for disadvantaged communities in the UK.

The tax relief on the CITR scheme is worth up to 25 per cent of the money invested, spread over five years.

However, the scheme will finish in 2012, if HM Treasury decides it will not ask the European Commission, who must approve financial instruments which use state aid, for an extension to the scheme.

Bernie Morgan, chief executive of CFDA said it expected a decision would be announced around the time of the Budget.

CITR has helped raise nearly £70m of affordable credit for businesses and social enterprises since 2003. It was devised by government to encourage private investment into CDFIs.