HM Treasury recently announced that from 30th November this year, it will remove tax reliefs of 30% or more for community energy projects. This means they will no longer be eligible for Social Investment Tax Relief (SITR) as well as Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).
The amendment, announced by the Financial Secretary to the Treasury in the third reading of the Finance Bill on Tuesday, we understand comes as result of concern about the potential misuse of tax breaks by private energy providers who may not have the strong commitment to the community.
Whilst we recognise the need to crack down on tax avoidance, we want to mitigate the impact on genuine community energy projects. Over the next few weeks, we will partner with leaders in the community energy sector to address the impact of this announcement and work on suggesting a definition of a community energy project that could be set out in the legislation in order to make sure genuine community energy companies do not miss out.