The government will apply to the European Commission for permission to increase the size of the forthcoming tax relief for social investment.
Social investment tax relief, which will apply to investments made after 6 April, will allow investors who put money into regulated social organisations, including charities, to claim back part of their investment against their tax bill.
The Treasury has today published its "social investment roadmap", which sets out plans for how it intends to increase the scope and scale of the relief.
The roadmap says that the government plans to expand the options for indirect investment and establish a government-run accreditation scheme for social impact bonds that are eligible for social investment tax relief.
The government will announce the rate and the maximum amount of investment eligible per organisation in the Budget in March, it says.
The roadmap says that the government has decided to ask the European Commission for permission to increase the size of the scheme above state aid limits. State aid limits each recipient to receive a maximum of €200,000 in aid over three years.
"To fulfil the government’s intention of introducing a larger scheme with a higher investment limit, the scheme must be cleared by the commission through a process known as notification," the Treasury said.
"We are in the process of making an initial approach to the commission, and will aim to start the process for seeking approval by April."
The commission aims to make a decision with 18 months of the start of the formal process, the Treasury said.
David Gauke, the Exchequer Secretary to the Treasury, said: "The government wants to make the UK one of the easiest places to invest in social enterprises in the world. Today we’re setting out the steps we plan to take over the year that will further enhance the environment for social enterprise in the UK, creating the right conditions to allow the sector to thrive.
"The government is keen to draw on the expertise of the social enterprise sector as we take the next steps in supporting this vital sector."