Page 102 - Social Enterprise A New Business Paradigm for Thailand

All public agencies have been required to adopt the Social Value Model and adhere to its guidance
from 1 January 2021 onward.

3.2.4 Social Investment Tax Relief (SITR), 2014

In 2014, the UK government introduced legislation incorporated into Schedules 11 and 12 of the
Finance Act 2014, which allowed individuals investing in social enterprises from 6 April 2014
onward to claim income tax relief of 30% on the amount invested, applied against their taxable
income. To qualify, the investment must be held for at least three years.

Additionally, investors who make a capital gain from their investment are exempt from Capital
Gains Tax (CGT) on those gains. However, they are still liable for income tax on dividends and

interest earned from the investment. The maximum investment eligible for relief is £1 million per
year, and individuals may invest in more than one social enterprise.

For example, Mr. A, a high-income taxpayer subject to the top 45% income tax rate and a 28%
CGT rate, makes an investment of £100,000 in a social enterprise during the tax year. Mr. A would
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receive the following tax relief:
• Income tax relief: £100,000 × 30% = £30,000
• CGT exemption: £100,000 × 28% = £28,000
• Cost of investment net of tax reliefs = £42,000
Social enterprises eligible for SITR investment include Community Interest Companies (CICs),

Community Benefit Societies with asset lock provisions in their governing rules, and charitable
companies or charitable trusts. Investments may be made either as equity contributions or as
loans. Each eligible social enterprise may receive a lifetime total of up to £1.5 million in SITR-
qualifying investments.

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At the time the investment is received, the social enterprise must meet the following criteria :
(1) its net assets must not exceed £15 million, (2) it must have fewer than 250 employees, (3) it
must not be under the control of another company, and (4) its assets must not exceed £16 million
immediately after receiving the investment. However, the SITR scheme is only applicable to

investments in social enterprises established on or before 5 April 2023. This means that social
enterprises founded on or after 6 April 2023, as well as investors in such enterprises, are no longer
eligible for tax relief under this scheme.

46 ACCA Global, Social investment tax relief, Source: https://www.accaglobal.com/gb/en/technical-
activities/technical-resources-search/2014/may/social-investment-tax-relief.html, May 2014.
47 SWOOP, Social Investment Tax Relief (SITR) explained, Source: https://swoopfunding.com/uk/equity-
financing/sitr-social-investment-tax-relief/, April, 27,2024.
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