The UK government is hoping to encourage investment into businesses that are working for social benefit, through the creation of a new form of tax relief
From April, equity and certain debt investments into social enterprises will qualify for a 30% tax credit.
Unlike businesses and charities, social enterprises, such as The Big Issue or Jamie Oliver’s restaurant Fifteen, have never had their own tax relief scheme. This initiative is the first of its kind in Europe.
“Access to finance has always been the biggest barrier for social enterprises to both start up and grow, and the social investment tax relief has the potential to inject much-needed capital into these organisations,” says Nick Temple from industry body Social Enterprise UK.
Characterised by their combination of philanthropy and profit, social enterprises are on the rise. Government data estimates there are approximately 70,000 of them in the UK, employing almost one million people.