VCM60320 | Venture Capital Schemes Manual: venture capital schemes: the Social Investment Tax Relief: advance assurance requests: the SITR schemes and eligibility

From HM Revenue & Customs · Venture Capital Schemes Manual

To be eligible for Social Investment Tax Relief (SITR) a social enterprise must be one of the following:

a community interest company
a community benefit society that is not a charity, but with an asset lock
a charity that is recognised by HMRC, which can be a company or a trust
an accredited social impact contractor

The social enterprises receiving investments under the SITR are recipients of State aid. There are two different types of State aid within the SITR rules, depending on the age and investment history of the social enterprise. Each State aid has different day-to-day investment limits.

The ‘de minimis’ aid for older social enterprises

For investments made on or after 6 April 2017, an SITR investment counts as ‘de minimis aid’ if, broadly, the social enterprise’s trade is over seven years old. A social enterprise may receive a maximum amount of de minimis aid of 200,000 euros over a rolling three year period, roughly equating to a total SITR investment of 344,000 euros, ending with the latest aid award. The limit includes any de minimis aid received in that period, including investment under the Seed Enterprise Investment Scheme (SEIS).

There is also a lifetime investment limit of £1.5 million.

All SITR investments made before 6 April 2017 were made under the de minimis scheme.

General Block Exemption Regulation (GBER) risk finance aid for newer social enterprises

For investments made on or after 6 April 2017, SITR investments count as GBER risk finance aid broadly if the social enterprise’s trade is less than seven years old. There is no limit on the amount of an individual GBER investment, subject to the lifetime limit for each social enterprise of £1.5 million.

The lifetime limit for State aid

The maximum amount of SITR investments a social enterprise and its subsidiaries may receive in its lifetime is £1.5 million. As well as SITR investments, other State aid investments such as SEIS, EIS and other risk finance investments count towards the maximum.