Chancellor might widen tax reliefs

Today's Budget statement by Chancellor Gordon Brown is expected to widen the application of community investment tax relief.

The relief currently allows tax breaks of 25 per cent over five years on investments in community development finance institutions in deprived communities. These institutions often struggle to attract investment from mainstream banks.

A Treasury consultation found some organisations wanted the relief extended to equity investments in for-profit businesses. The consultation included a proposal to allow community organisations to develop a range of community investment tax relief investment products.

"The sector is hoping for amendments to cover this relief," said Sarah McGeehan, deputy chief executive of the Community Development Finance Association.

Stephen Lloyd, head of charities and social enterprise at lawyers Bates, Wells & Braithwaite, said tax breaks should be available across the UK, not just in disadvantaged communities.

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