The Chancellor, George Osborne, has announced in the Budget that the Government will consult on a new tax relief to encourage private investment in social enterprises.
This proposed new tax incentive is designed to make it easier for private investment in social enterprises, giving social enterprises greater access to growth capital.
Social enterprise leaders have welcomed the announcement. Chief Executive of Social Enterprise UK Peter Holbrook said: “We wholly welcome the Chancellor’s announcement in today’s Budget – growing the UK’s social investment market is crucial as traditional sources of finance continue to dwindle in the economic downturn. Capital needs to be raised in new ways to support social enterprises working to address the country’s social and green issues – levering in private investment is vital.
“We’re delighted that The Treasury has listened to the social enterprise sector which came together to campaign on this, and look forward to working with Government on the detail, in advance of the tax incentives being introduced. Access to finance is the biggest barrier for our members keen to grow their businesses and have a greater impact.”
Nick O’Donohoe, Chief Executive of Big Society Capital, said: “The Chancellor has today given a very welcome commitment to make changes to the tax system that we believe can stimulate significant additional investment in social enterprises. The Government has shown a consistent commitment to developing a vibrant social investment market in the UK and this latest measure represents a considerable boost for social entrepreneurs and community organisations, up and down the country, that are looking to raise capital. The Chancellor is rightly addressing the anomaly that there are tax breaks for many areas of risk capital investment, and tax breaks for charitable donations, but no tax breaks for those who want to invest risk capital in businesses whose primary aim is to improve society.”