NCVO Commission on Tax Incentives: Analysis and Recommendations

NCVO Commission on Tax Incentives: Analysis and Recommendations

A diverse range of social ventures, including charities, voluntary groups and social enterprises, will contribute significantly to the growth of the UK economy over the coming years. But as we face
ongoing economic uncertainty and as the challenges for our public finances continue, so our civil society organisations are coming under increasing financial pressure. Social investment will not fill gaps in income or provide a panacea but is undoubtedly part of the
solution. The Coalition Government is committed to supporting the development of the UK’s small but well-established social investment market, thereby creating better access to capital for charities and social enterprises. Its social investment strategy has been followed, inter alia, by the establishment of Big Society Capital in the autumn of 2011.

Incentivising social investment through a range of fiscal incentives created for ‘mainstream’ businesses has had a limited impact. Gaps and inconsistencies in how the current UK tax system applies to social ventures limit the growth of these organisations and hence their contribution to the UK’s economic prosperity, social cohesion and environmental sustainability.

The NCVO Commission has brought together a range of specialists and representative bodies, and a diverse range of expertise, experience and evidence from a number of social investors and social investment intermediaries. The group’s recommendations are focused on specific technical changes
which could help unleash a step change in the level of investment directed towards the growth of social ventures, in order to stimulate a direct positive contribution to the UK economy, society and
environment.