The Treasury has stated that community energy projects will be excluded from the Enterprise Investment Scheme (EIS)/Seed Enterprise Investment Scheme (SEIS) from 30 November 2015. They have further stated that community energy schemes will be excluded from Social Investment Tax Relief (SITR), reversing the governments’ previous statement in March 2015.
These announcements mean that community energy organisations which benefit from subsidies for the generation of renewable energy will no longer be eligible for any tax-advantaged investment for investment made on or after 30 November 2015.
Share offers will need to be closed and shares issued by 30 November 2015 for investors to qualify for the relief – even where investments have received advance assurance.
The announcement was made by the Financial Secretary to the Treasury in Parliament during the Report Stage of the Finance Bill who stated regulations would be laid to this effect.
This is clearly a major blow for the sector, particularly to groups who are already planning share offers. There has been no prior warning of this policy change and no explanation of why the government has decided take this step. There is a hint that the government considers there has been ‘abuse’ of the reliefs.
For the government to put through a policy change with so much impact on the community sector so quickly with so little discussion is, at best, deeply disappointing. Regen has asked the Treasury for an explanation and is already in contact with our partners to consider the potential for lobbying.
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