[This is an excerpt from the second of my columns for Third Sector magazine: you can read the entire original article, and much else of interest besides, here on the Third Sector website]
“……Nevertheless, tax remains a vital issue: changes to tax systems and current regulations could help social investment achieve much more and help more money flow towards third sector organisations. This is where we enter the alphabet soup of tax-incentive schemes.
Suffice to say that, alongside improvements and extensions to CITR, changes to other existing schemes are needed to make them appropriate for investment in social enterprises and other social ventures; these include the Enterprise Investment Scheme (EIS), Venture Capital Trust (VCT) and the Seed Enterprise Investment Scheme (SEIS). This gives us the alphabet soup, but provides little direct benefit to the sector.
I think it sometimes gets interpreted as special pleading when we ask for social enterprise tax breaks, but surely there’s no justification for opposing social enterprises accessing benefits that have already been created for mainstream businesses. All we’re asking for is a level playing field; after all, those benefits could help third sector organisations raise more money to achieve more social and economic impact, whether that’s through donations, social investment schemes or crowdfunding and other retail-side developments.
Which is what it’s all about: money is a means to an end and, for our members, the end consists of achieving a social mission and maximising their impact. That makes wading through the alphabet soup, advocating tax changes and helping build the pipeline all worthwhile….”