Social Investment Tax Relief (SITR) is under threat. It currently does not cover renewable energy projects but it ought to – and it is in use by many of our friends in the wider co-operative movement. So please do lobby your local MP on this!

Please use this letter, adapt it to add your local context, and of course your name and address at the end. Personalising it and adapting it as much as possible is important because the letter is likely to be forwarded to the same desks in the Treasury.

You can search for your MPs name and contact details here

Please remember to copy in d.law@communityenergy.org at Community Energy England.

 

Dear {Insert name of local MP}

I write as a supporter of {insert name of local community energy project/s}. After 5 years of policy setbacks and removals of support, community energy struggles to make a business case to get active at all – yet it is an absolutely vital component in engaging the consent and participation of the wider public in the urgent energy transition (without which, as the Committee on Climate Change makes clear, we will fail to achieve Net Zero) as well as inventing and delivering local climate solutions and social benefits.

Community energy projects have never been eligible to receive Social Investment Tax Relief (SITR), but pioneering projects made good use of Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) tax reliefs in order to get innovative models off the ground. These projects were supported by members of the public. Tax reliefs reduced their risk and enable much wider participation.

Our eligibility to receive EIS and SEIS Tax Relief was removed in 2015 on the basis that energy production was subsidised. That is no longer the case. Community energy projects are inherently risky and we urgently need access to tax reliefs to put in place the next generation of community energy projects.  SITR is the natural home for tax relief for not-for-profit low carbon initiatives. But SITR is due to end on 5th April unless extended in the forthcoming budget.  I’d be grateful if you would ask the Chancellor and Treasury ministers to extend the relief and reform it so it can fulfil its potential. We need it to still be in place to reform it!

It is an innovative and valuable tax relief in theory. It is the only dedicated relief aimed at bringing  private investment into social enterprise and charities, so is particularly valuable at present, when we need all possible resources for recovery, especially those that are local and delivering social benefits.

Additionally social enterprise itself, with its capped but fair returns on capital and its positive investment focus, is seen as an increasingly attractive middle option, between shareholder dominant investment and charity, so social enterprise itself should be encouraged. Some of the British public have saved over £100bn during the Covid emergency and many of them are looking for social impact when they invest. SITR will help de-risk social investment, so encouraging more of it.

SITR has failed to match expectations, raising only ~ £10m to date, because it contained so many restrictions on the basic principles of social investment, and excluded so many key and dynamic activities (such as tackling climate change) and had so many restrictions on the means of delivery of positive change. The Treasury and HMRC were warned of this at the time.

SITR needs reforming, not abandoning, when it could be very valuable, particularly at present.  A consultation was held on the changes needed, but no response has ever been published.  At the very least it should be extended to include renewable energy, and part of the reform would be to make investment in community energy a qualifying investment, but it is just as important to reform it to enable it to deliver its original objectives, and to ensure that we are not left with a gap at this time of economic challenge and recovery.

Community Energy England’s SITR consultation response is here. They are copied in and can provide more details and suggestions for reform if you wish.

Yours sincerely,

 

 

 

{Insert name and postal address (essential for them to act)}