In the lead up to the budget Resonance joined forces with like-minded organisations and individuals including Big Society Capital, Social Enterprise UK, Co-ops UK, MPs and others across the UK united in our campaign to Save SITR. The collaborative campaign urged the Government to save and reform Social Investment Tax Relief (SITR), a vital tax relief that helps social enterprises, charities and community businesses get affordable, patient investment from like-minded investors, enabling them to deliver crucial services.
Thanks to the huge collective efforts of all involved in the Save SITR campaign, the Chancellor announced on 4 March an extension to SITR until April 2023.
This is great news for social enterprises across the UK. SITR is a vital tool providing a route to raise finance that social enterprises need to grow their businesses and their social impact.
But this two-year SITR extension is just the start. Our campaign asked the Government for this vital tax relief to be extended for at least three years, as we know that we need this time to be able to raise investment into our funds from investors, identify and work with growing social enterprises and then deploy the capital raised.
We hope that as part of the Government's response to the 2019 consultation on SITR it recognises the huge potential that this tax relief has to make transformational change to social enterprises, which will help the country to build back better. However, we would also like to see the Government, set in place a plan to reconsider this two-year extension to make the time frame longer, as well as potentially reformed too - so that we can get more capital flowing into our country’s social enterprises and charities.
SITR was introduced in April 2014 and is the government's tax relief for social investment which encourages individuals to support social enterprises and charities by investing in them. This enables social enterprises to access new sources of finance and is vital for them as they are often ineligible to receive investments under other tax-advantaged schemes. SITR investment helps social enterprises grow their business, their impact and supports their long-term sustainability.
SITR also benefits investors who, as well as the social impact they are providing, have the potential for competitive returns on their investment and a 30% tax relief.
Resonance track record
Resonance has two established SITR funds:
Without SITR investment the social enterprises invested in would not have been able to scale up their operations and provide vital support for typically the most vulnerable and disadvantaged people and communities in these regions.
Our SITR funds evidence the impact of SITR and its potential to achieve transformational change.
Despite the enormous impact of COVID-19 and the lockdowns on social enterprises, deployment has continued. Demand for repayable finance was clearly affected by the uncertainty enterprises faced and the amount of emergency grant funding available, but due to the depths of our relationships in our regions, from September 2020 the use of grants (from Access Foundation) to create blended loans for the recovery saw the two funds deploy just under £1m in loans (and over £400k in grants) in a nine month period, from July 2020 to March 2021.
In order to build back better, and level up the country – especially in light of COVID-19 recovery - we need to ensure more social enterprises and charities are provided with the opportunity to expand and scale their impact through access to capital, SITR is one way that allows them to access this capital.
Find out about our South West SITR Fund.
Find out about our West Midlands SITR Fund.
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Resonance Limited is a company registered in England and Wales no. 04418625
Resonance Impact Investment Limited, a subsidiary of Resonance Limited, is authorized and regulated by the Financial Conduct Authority (FCA). Firm number 588462.
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