Responding to the Chancellor of the Exchequer’s announcement on the Social Investment Tax Relief in today’s Autumn Statement.
Nick O’Donohoe, Chief Executive of Big Society Capital said: “The Social Investment Tax Relief could be transformative for the UK, potentially unlocking nearly half a billion in finance for charities and social enterprises over the next five years. Until now, social investment has been dominated by charitable foundations, the Government and Big Society Capital, but these plans could open it up to thousands of individual investors.
Today’s announcement that the Relief will include a range of debt and equity products as well as Social Impact Bonds is positive, as this should provide what many organisations crucially need, as well as accelerate the development of innovative social outcomes-based products.
We now hope to see the Government deliver on its bold ambitions in the detail of the draft legislation next week by setting the rate of relief for investors to be comparable with existing reliefs such as the Enterprise Investment Scheme (EIS), and ensuring the relief applies to investment of sufficient size that it will really enable organisations to grow and develop.
It is crucial that the final design of the Relief meets the needs of charities and social enterprises, while also acting as a real incentive to existing individual investors to use their money for social investment. We therefore look forward to the draft legislation next week and the roadmap in January 2014. We will then work with investors, charities and social enterprises to support them in taking advantage of the opportunity presented by this Relief to help the social investment market flourish.
We are pleased that the Chancellor has recognised the personal contribution that Sir Ronald Cohen has made in calling for this tax relief.”
Nick O’Donohoe’s statement follows the statement from Sir Ronald Cohen:
Sir Ronald Cohen, Big Society Capital Chair, said:
“We welcome these measures which begin, here in Britain, the bold process of extending to investment in social organisations the incentives available for SMEs. Social organisations need serious tax incentives in order to attract capital for innovation and to scale their organisation’s efforts to improve people’s lives. We look forward to continuing our constructive dialogue with HM Treasury so as to finalise bold incentives in the New Year, obtain State Aids approval for higher investment limits, and define appropriate investment vehicles to attract investors.”