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Community Investment Tax Relief

For individuals and corporate bodies
 
What is it?

A tax relief available to individuals and corporate bodies investing in accredited Community Development Finance Institutions (CDFIs), which then in turn provide finance to qualifying profit-distributing enterprises, social enterprises or community projects.

The tax relief available to the investor is five per cent per annum of the amount invested in the CDFI and may be claimed in the tax year in which the investment is made and in each of the four subsequent years.

Why has it been introduced?

A Community Investment Tax Credit (CITC) was one of the recommendations of the Social Investment Task Force's (SITF) report Enterprising Communities published in October 2000.

As proposed, the CITC concept envisaged the award of tax relief to those providing finance to CDFIs for on-lending to enterprises in disadvantaged communities that are excluded from mainstream sources of finance.

Government accepted the recommendation and detailed development of what is now known as the Community Investment Tax Relief (CITR) was undertaken as a collaborative project involving HM Treasury, Inland Revenue and the Enterprise Directorate.

The necessary legislation is contained within the Finance Act 2002, with more detailed operational information set out in the HM Revenue and Customs CITR Manual and in the CITR Material published by the Secretary of State for Trade & Industry.

 (1024KB)

What is the BERR's role in implementing CITR?

BERR’s Enterprise Directorate manages the accreditation process for CDFIs wishing to use CITR. The Community Development Finance Association (020 7430 0222, info@cdfa.org.uk) represents the community development finance sector and acts as the first point of contact for bodies wishing to apply for accreditation under the scheme.

Details of the criteria CDFIs need to meet can be found in

Community investment tax relief: material concerning the accreditation of community development finance institutions  (1024KB)

This should be read in conjunction with the CITR (Accreditation of Community Development Finance Institutions) Regulations (2003/96) as amended. More detailed guidance on the Regulations can be found on the HMRC website in its Community Investment Tax Relief manual.

Once accredited, a CDFI is required to submit an annual return to BERR’s Enterprise Directorate detailing its onward investment activities for each accreditation year. Details of the annual return requirements can be found at Annex C of the Material concerning the accreditation of CDFIs.

Community investment tax relief: material concerning the accreditation of community development finance institutions  (1024KB)

How can I find out which CDFIs have been accredited?

Refer to the list of accredited CDFIs below (1 page).

Accredited Community Development Finance Institutions

How can I find out more?

Many frequently asked questions are answered in the Q & A brief.

Questions and answers relating to community investment tax relief  (200KB)

If you have any other questions please contact: 

Jonathan Marshall
Room 185
1 Victoria St
London
SW1H OET
Email: citr@berr.gsi.gov.uk
Tel:0207 215 6318
Fax:0207 215 6768