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A Simple Guide to Tax Reliefs for Charities and Social Enterprises: An overview of tax reliefs for investing into charities and social enterprises

Report
June 2018
Big Society Capital and Bates Well Braithwaite
This briefing is a summary of the tax reliefs available when investing into charities and social enterprises (or in the case of gift aid, when making donations).
Charities and social enterprises can obtain finance in many ways – through donations, grants or contracts from local authorities, trading with businesses or the public, and by raising investment.
In many cases, a charity or social enterprise will get the funds it needs without needing to consider raising investment (such as by way of shares or loans). To understand more about what social investment is Good Finance have produced a short video to illustrate.
The choice to raise investment may be more appropriate for some organisations than others, and should be based primarily on the ability to repay the investment and any interest that might be due on the investment. A regular, reliable income stream from an asset or trading activity will often be a key financial consideration.
Once the choice to raise investment has been made, there are a number of available tax reliefs that might encourage investors to participate. This briefing focuses on the tax reliefs available to those investing in charities and social enterprises, including Social Investment Tax Relief, Community Investment Tax Relief and the Enterprise Investment Scheme.
Aside from tax reliefs available to investors, charities and social enterprises also need to be aware of the legal considerations for communicating the investment opportunity to investors. Bates Wells Braithwaite and Big Society Capital have produced A Simple Guide to Financial Promotions which summarises these requirements. This briefing is a practical summary of the law. It should not replace legal advice tailored to your specific