A new ‘roadmap’ for social investors, written by four MBA students from Oxford University, aims to show the breadth of tax relief available on a wide range of investments.

Exploring Tax Incentives for Investors in Social Enterprises, written for the Office of the Third Sector, highlights the range of tax reliefs available for investors in all types of social enterprises, including non-charities.  Relevant tax incentives range from the Enterprise Investment Scheme (EIS) to Community Investment Tax Relief and Gift Aid. Social enterprises that take up legal forms offering share capital could enjoy tax reliefs available through various venture capital schemes, the guide says.

Analia Lemmo, co-author of the guide, says, “The guide is important because there are a lot of social enterprises out there that aren’t charities and it is important to show the breadth of incentives available for investors.

“While tax advisors may have extensive expertise when it comes to corporates, fewer have knowledge about the implications for social enterprises. We hope the guide fills that gap."

The tax reliefs available to charities mean that at present there is an incentive for social enterprises to attain charitable status, the guide says. However Lemmo points out that, “this makes it far harder to get investment from private sources".

“The guide will hopefully provide a starting point for investors in social enterprises to explore opportunities in the current tax schemes.” she added.

The roadmap produced in the guide shows the different pathways for tax efficient investment available.

The guide will be available on the Philanthropy UK website shortly.