Social investment tax relief: draft legislation

The government has published draft legislation and a policy paper on changes to social investment tax relief (SITR).


The Draft legislation: Income Tax relief for social investments makes a number of changes to SITR which apply to investments made on or after 6 April 2017. The changes include an increase in the amount of money newer social enterprises may raise from individual investors under the scheme, and provisions designed to better target the scheme on higher risk activities and deter abuse.


The policy paper Income Tax: enlarging Social Investment Tax Relief explains the changes in more detail.


The changes are:


  • the amount of investment a social enterprise may receive under the SITR over its lifetime will be increased to £1.5m
  • social enterprises must raise their first investment under the SITR or other risk finance investment no later than seven years after making their first commercial sale
  • individuals will not be eligible to invest in a social enterprise under the SITR unless any other investments made by the individual in the social enterprise, including loans, were made under the SITR or other risk finance investment
  • social enterprises will not be able to use money raised under the SITR to replace an existing loan
  • the maximum number of full time equivalent employees a qualifying social enterprise may have will be reduced to fewer than 250 employees
  • the list of excluded activities will be extended
  • anti-abuse provisions similar to the disqualifying arrangements requirements in the EIS and SEIS rules will be introduced
  • provision will be made to introduce an accredited scheme for affordable social care through regulations at a later date.


Comments on the draft legislation are invited by 23 February – please send any comments to