Acevo chief executive says it is wrong to scrap it without a suitable replacement
The government should not scrap community investment tax relief without providing a better alternative, Sir Stephen Bubb, chief executive of Acevo, has said.
CITR, which allows investors in community development finance institutions to reclaim up to 25 per cent of their investment in tax relief over five years, was recommended for removal on the grounds of its low take-up in a report last week by the Office of Tax Simplification.
In a letter to George Osborne, the Chancellor, Bubb says the government has committed itself to growing social investment and acknowledged that the third sector suffers from a lack of capital.
The government had promised to make social investment a "third pillar of finance for social ventures" in its recent publication Growing the Social Investment Market: A vision and strategy, Bubb says in the letter.
"All this makes it precisely the wrong time to scrap a tax relief aimed at promoting investment in social ventures," he writes. "Doing so would not just remove an incentive for social investment, it would send a terrible message to third sector organisations and investors.
"I would therefore strongly urge you not to scrap CITR without devising a better alternative."