8.7 Community Investment Tax Relief

Community Investment Tax Relief (CITR) is designed to encourage individual and corporate investment in accredited Community Development Finance Institutions (CDFIs), which in turn must invest the capital in small and medium sized enterprises based in, and/or serving, the most disadvantaged communities in the UK.

Investment can be in the form of debt or equity, and could include withdrawable share capital in CDFIs that are structured as societies.  CDFIs are accredited by the Department for Business Innovation and Skills for the purposes of CITR.

The tax relief, which is worth 25% of the total invested spread over 5 years, is available against either income tax or corporation tax.  State aid de minimus rules apply to the beneficiary enterprises, which must not receive more than €200,000 in aid over any three year period.

Detailed guidance on CITR is available in the HMRC Community Investment Tax Relief Manual CITM1000 and Helpsheet HS237.