In 2003, the UK Government introduced the CITR scheme to provide private investors with a significant tax incentive to finance enterprises within disadvantaged communities through accredited CDFIs. Whilst a similar scheme is now well-established in the US, providing more than USD5.5 billion in funding since its inception, activity in this area in the UK has been limited but is slowly beginning to ramp up due to a recent change in UK law which increases the limits on the amounts accredited CDFIs can raise. The Council of the European Union is also looking at ways to support the development of the social economy sector in the EU.
In this article, we discuss the UK CITR scheme in more detail and aim to demystify CDFIs and the accreditation process, as well as discussing what counts as a qualifying investment and importantly, how investment into CDFIs may be maximised. We also…
