Among the announcements about pensions, childcare and energy bills, if you look deep into the budget paper from last week you will find a small, sad announcement about the demise of Social Investment Tax Relief (SITR) which is being allowed to expire in April this year.
No one could accuse SITR of being a runaway success, and that is certainly true - since its inception some years ago, around £15m of investment has been raised for social purpose organisations using the tax relief - not a figure to set the world on fire.
However, it remains the case that SITR was one of the only tax reliefs which specifically encouraged investment in charities and social enterprises. To benefit from SITR, your organisation had to be a charity, a community interest company, or a community benefit society - a sector of organisations that do great work, but which have historically struggled to obtain investment.
The problem with SITR wasn't that there was a lack of willing investors, or that the social sector isn't ready for investment (though that may have been a contributing factor) - as those of us who were asked to advise on the relief will testify, it was the criteria (you can find them here).
Organisations had to be under a certain size and turnover, so larger charities and social enterprises were excluded. Some activities were also excluded, including energy generation (so no SITR for community-led renewable energy schemes), leasing or letting assets (so tricky to use SITR in the context of community asset transfer), etc. Given the comparative complexity of the relief, it is perhaps not a surprise that SITR didn't set the world on fire, and therefore has now been allowed to quietly slip off into the sunset.
All of which, of course, does not mean that the issues that SITR was designed to address do not continue. Charities and social enterprises still do their amazing work in a challenging financial environment. The traditional model of donations and grant funding for charities remains under huge pressure. A tax relief to promote investment into organisations that exist to promote social good remains a key potential tool; it's just that now we will have to (re) invent it.
Two years after securing a last-minute extension, the Social Investment Tax Relief scheme is being scrapped for good. “SITR will be allowed to expire in April 2023. New investments made on or after 6 April 2023 will no longer qualify for Income and Capital Gains Tax relief,” the budget paper reads.