A tax relief is 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.
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 Business, Innovation and Skills.
BIS’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
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 BIS’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.
Refer to the list of accredited CDFIs below (1 page).
Many frequently asked questions are answered in the Q & A brief.
If you have any other questions please contact:
Email: citr@bis.gsi.gov.uk
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