The UK’s traditional tax breaks for some forms of SME investment look likely to be applied to SIBs as well:
Chancellor Expected To Announce Social Impact Tax Breaks
Tax breaks for investing with a conscience are expected to appear in next month’s autumn statement from the Chancellor, in a timely boost for alternative finance following the meltdown of the Cooperative Bank.
The government wants to encourage social impact investing, where individuals and businesses subscribe to projects with social outcomes, which may deliver a return but allow the capital to be recycled to a new project.
George Osborne is expected to announce tax relief for investors in social impact bonds (SIBs), modelled on the Enterprise Investment Scheme, with potentially a regional variant for Scotland.
Scotland’s first SIB attracted investors to a programme for young people not in education or employment, created by charity Perth YMCA and launched 18 months ago. It offered investors returns linked to measurable social outcomes, and was one of six across the UK sponsored by the Department of Work and Pensions.