Delight as community investment tax saved in budget

Philanthropy has been given a boost by the budget. The community finance organisation Foundation East is delighted that Community Investment Tax Relief (CITR) will continue. The scheme is designed to encourage social investment by individuals and organisations, with funds being made available to businesses and community organisations that have been refused bank finance.

Katy Ford, Chief Executive of Foundation East, says:

“This is brilliant news as the future of CITR has been in doubt for some time. Community Finance companies throughout the country have conducted a concerted lobbying campaign to retain this tax efficient incentive and will now consult with the government to see how the scheme can be made more effective.”

CITR was launched ten years ago to stimulate altruistic investment through Community Development Finance Institutions, such as Foundation East. These social enterprises provide fair and affordable business and personal loans to those unable access finance from banks. 

Corporate or individual investors purchasing shares in Foundation East under the CITR scheme earn tax relief of 5% per year for five years on the amount invested. Nationally CITR has raised £70m to date. 

Although Foundation East will loan to any business that has a viable business plan, the organisation is particularly interested in supporting initiatives that offer a community benefit.  

Katy continues:

“We hope this endorsement will encourage more individuals and companies to become members of Foundation East, their investment helping to boost economic growth in the eastern region.”

CITR represents the only widely applicable tax relief available to the social investment market for both corporation tax and income tax payers.

About Foundation East

Foundation East is an Industrial and Provident Society established in 2004.  Its members are individuals and organisations that support its vision: to increase prosperity and quality of life by providing finance to viable businesses that have been refused bank finance.

Foundation East raises funds from its members, both individuals and corporates, in the form of non-transferable shares. Finance also comes from charitable and local government grants.  Business loans are leveraged against this capital which is held as a security deposit with Unity Trust Bank.

There is a growing consensus across society that a more pragmatic approach is needed to support local businesses, and of the wider benefits that can be gained from maintaining employment in the community.  According to the New Economics Foundation there are around 80 community development finance institutions in the UK, who have financed 15,000 businesses and sustained or created 33,000 jobs.

Foundation East demonstrates that new thinking is possible and it is making a difference to peoples’ lives.

©2015 Holdsworth Associates