26/01/12
By Andrew Holt
A new report sets out recommendations for catalysing the growth of the social investment market.
The report, which has been put together by the National Council for Voluntary Organisations’ (NCVO) Commission on Tax Incentives for Social Investment, explores the current market and makes recommendations for strengthening its role in building a strong economic future whilst also delivering social returns.
It suggests specific technical tax changes to help increase the level of investment in social ventures, in order to bring wider benefits to the UK economy, society and environment.
The report recognises the strength of the existing social investment market, but gaps and inconsistencies in how the current tax system applies to social ventures can limit the growth of the market and restrict access to finance for charities and social enterprises.
Sir Stuart Etherington, chief executive of NCVO, said: "In these challenging economic times, social investment can form part of the solution by supporting civil society organisations to become more innovative, effective and financially secure. Government has a real opportunity to capitalise on this potential as it seeks to build a strong and sustainable economy."
A Cabinet Office Spokesperson added: ‘We welcome this report and its clear recommendations on how fiscal incentives can support the social investment market. Social ventures are already a sizeable chunk of the economy with a turnover the equivalent to 1.5 per cent of GDP and we want see them becoming a larger part of the economy in the future.
"We will be looking into how gaps and inconsistencies in the tax system limits the growth of the social investment market and will be consulting the sector ahead of the budget on how to make Community Investment Tax Relief (CITR) more effective."
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