Social Investment Tax Relief: 2019 Review

Government has launched a 'Call for Evidence' on Social Investment Tax Relief. Co-operatives UK is eager to work with members with an interest in securing a more useful relief for the sector.

"Reducing restrictions on the size and type of projects which can claim Social Investment Tax Relief could accelerate communities taking ownership of important community assets and expand the use of small scale finance for community energy projects. In these areas Social Investment Tax Relief could play a bigger role in helping social sector organisations to be more financially resilient." Government, Civil Society Strategy, 2018 


Up until recently, tax reliefs were very useful in supporting investment in co-operative and community benefit societies, not least through community shares. For a number of years Enterprise Investment Scheme (EIS) helped incentivize community investment in start-up and early growth societies,  providing capital for new community businesses in areas such as renewable energy and rural broadband, while also financing community buyouts of local businesses and assets. As government began to target EIS more tightly it ruled out business buyouts, energy generation (including our hard-won 'community carve out') and most recently introduced new 'risk to capital' requirements. The buyout and energy changes ruled out swathes of the community shares market.

In parallel, government announced the expansion of the new Social Investment Tax Relief (SITR), which for a while looked like it could become a more natural relief for co-operative and community businesses. Of course there were limitations from the start: co-operative societies are ineligible. And then the list of excluded activities for SITR increasingly began to copy that of EIS, most problematically ruling out energy generation and asset hire. With the asset hire measures government withdrew support for social investments where land and assets will ultimately be owned and controlled by the community, but where the day to day is undertaken by a third party, leading many in our sector to question the utility SITR altogether. We made a submission to Finance Bill 2017 warning that these measures would limit the utility of SITR for community investment. Sadly we were ignored.

This 2019 review provides an opportunity to ask government to reconsider these problematic developments, so that SITR can live up to its earlier promise as a useful tool for supporting co-operative and community investment.

Civil Society Strategy

Government's Civil Society Strategy (August 2018) included some welcome acknowledgements that SITR might not have developed optimally for many forms of social investment. In our advocacy on the strategy we emphasized the importance of community shares and community ownership in building of a more dynamic, participative civil society and explained how SITR was misfiring on these fronts. Government responded with new commitments to support community shares and community ownership and also made aspirational, though noncommittal, remarks about how SITR could be improved in a future review to better serve both. Of course, the Office for Civil Society could not be committal as control of SITR rests firmly with HM Treasury and the received thinking in 1 Horse Guards has often been less supportive of our cause. Still, the Civil Society Strategy may provide some leverage in Whitehall in support of improvements we might seek in the coming review.

Member input and participation

Co-operatives UK will be seeking to influence the SITR Review. To maximize our impact we would like to draw on the expertise and aspirations of members and partners who:

  • use or support others to use community shares or debt-based community/social investment 
  • have ideas for how SITR could be improved to better-support community and co-operative investment

Please download our draft response here and return with any comments via email to [email protected] by 17 June 2019.

You can find the government consultation hereThe deadline for responding to government is 17 July 2019.

Informal working group 

We will try and convene an informal, online working group to co-produce a response to the SITR Review. If you would like to be part of this group, please add your name, the name of the organization you're part of (where applicable) and your email address to this Google doc. You are also invited to comment on, add to or amend the notes on possible influencing objectives.


e: [email protected]

t: 0161 214 1775