HM Treasury and the Department for Business, Innovation and Skills (”BIS”) have issued a consultation on the Government’s plan, announced at Budget 2013, to introduce a new tax incentive to encourage private investment in social enterprise for 2014.
Social enterprises are businesses with primarily social objectives and span a variety of business models and legal structures; and trade in various areas including employment, healthcare and sport and leisure. By combining business practice with social purpose, social enterprises can find innovative solutions to entrenched social problems such as fractured communities, homelessness and high rates of reoffending.
The aim of the consultation is to set out proposals for a tax relief for private investment by individuals in social enterprise. The consultation aims to gather views on the best design for the relief and the objective of making it well targeted and effective, without creating opportunities for tax avoidance.
The tax relief rates will be announced in Budget 2014 and are intended to encourage private investment in social enterprise, helping it to become self sustaining in the long term.
The consultation closes on 6 September 2013 and full details may be found at Social Investment.