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Introduction to tax relief for social investments (SI)

E3.901 Outline of relief for social investments

Note that this scheme closed to new investment from 6 April 2023 onwards.

The concept of tax relief for social investments is simple. It aims to encourage long-term (at least three years) risk investment by individuals in social enterprises (that is to say, community interest companies, community benefit societies, charities, accredited social impact contractors and other bodies prescribed from time to time by the Treasury) by giving the investor a reduction in income tax liability calculated as a percentage of the amount invested (initially set at 30%). However, applying the relief in practice is considerably more complicated¹.

Some of this complication is inevitable. There must be eligibility criteria for the investment, the investor and the social enterprise (SE). It follows that there must be relief withdrawal mechanisms if eligibility lapses in some way, with accompanying procedures for assessment, appeal, information and penalties. But within this structure,