There have been a number of recent announcements regarding the Social Investment Tax Relief (SITR) which advisers should be aware of if they are reviewing SITR as an option for their clients

Last week HM Treasury announced that the government would extend the exclusion of subsidised energy generation for the tax efficient schemes (SEIS, VCT and EIS) to community energy, adding to the recent exclusion for reserve power. This follows the announcement in July that the government would continue to monitor the use of the tax efficient scheme for investments to ensure it is not subject to misuse. The government also intends to extend the exclusion to SITR when it is enlarged.

In terms of when the limits will be enlarged to £5m per year per social enterprises (vs the current c. £275k), it seems to be some way off yet. After focusing on achieving State Aid approval for the VCT and EIS schemes, HM Treasury have stated it is unlikely there will be approval for the higher limit on SITR in the next six to twelve months. A Social VCT would then be considered once the limit for SITR was agreed, so 18 months away at least.

Whilst it is good that the government is still fully committed to supporting investment into the social sector, and sees SITR, and the expansion of this scheme as a key driver of this, the delay will be disappointing to some in the tax efficient industry. However some funds, such as our Bright Futures SITR fund will be unaffected.