Tax Day 2021 summary

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Tax Day 2021 summary
  • Personal tax
  • Social investment tax relief (SITR): responses to a call for evidence
  • Business tax
  • Transfer pricing documentation
  • Notification of uncertain tax treatment by large businesses
  • Reform of the taxation of securitisation companies
  • Employment tax
  • Tackling disguised remuneration tax avoidance
  • VAT
  • More...

Tax Day 2021 summary

Personal tax

Social investment tax relief (SITR): responses to a call for evidence

The SITR is a tax-incentivised scheme that supports qualifying social enterprises seeking finance, by providing tax incentives to encourage individuals to invest in them. The legislation contains a sunset clause for the SITR scheme to end in April 2021. Two years ago, the Government published a call for evidence on SITR which aimed to collect information on the take up of the scheme and its impact, in order to inform a decision about its future. The consultation has now closed and a summary of responses has been published.

Responses to the call for evidence include the following points:

  1. access to suitable finance can be a barrier particularly for capital projects

  2. investments through SITR are an important funding option

  3. the value of typical investment sought by social enterprises varies significantly

  4. tax reliefs are a good way to de-risk and subsidise social investment

  5. take-up of SITR has been lower than anticipated (although the original assumptions were subject to significant uncertainty)

  6. poor take-up may be due to low awareness and the scheme’s restricted eligibility criteria

  7. respondents reported difficulty in using SITR, though reasons behind the difficulty were varied

  8. there is a perceived lack of transparency of HMRC’s advance assurance service

  9. measuring success of SITR can be difficult as measurement may need to include social value, and not purely financial measures

It should be noted that the call for evidence pre-dated the ongoing coronavirus (COVID-19) pandemic, so respondents could not have reflected on the effects of the pandemic on social enterprises and social investment. Social enterprises have been carrying out vital work to support their communities through the difficult times, and the Government accepts that the funding landscape for social enterprises may have changed.

As a result of the responses and in recognition that many social enterprises are supporting communities across the UK through the pandemic, the Government announced in Budget 2021 that it would extend

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