Voluntary sector bodies are hopeful that changes to support social investment will be announced in the Budget tomorrow.
At present, only one tax relief exists specifically to support social investment: community investment tax relief allows investors, if they are UK taxpayers, to reclaim up to 25 per cent of their investment over five years.
However, the relief is often criticised as bureaucratic and difficult to use, and has been used much less than expected.
In a joint letter to George Osborne last month, 14 voluntary sector chief executives called for changes that would simplify and expand the social investment tax regime.
Ben Kernighan, deputy chief executive of the NCVO, said this week he was optimistic that some of the sector’s recommendations would be taken up.
"The government was keen for us to look into the question of tax relief," he said. "It has told us how helpful our work on it has been."
Jane Tully, head of policy at the Charity Finance Group, said that social investment was the area where there was the greatest likelihood of a new relief for the sector.
"We’re hopeful this will go through," she said.
Tully and Kernighan both said they thought it likely that the government would take some steps to simplify Gift Aid. Their organisations have both called for a universal Gift Aid database to record donors’ information. The government has previously suggested it would support this proposal.
Alex Massey, policy officer at Acevo, said he hoped to see a focus on social issues.
"We want the government to recognise that, alongside the economic recovery, there must be a social recovery," he said. "We’re hopeful there will be a focus in areas such as early intervention.
"The government has made encouraging noises. The social justice strategy, for example, was very encouraging."
The government has also indicated that there might be changes in income tax bands, said Kernighan, which would reduce the amount paid by higher earners and reduce the amount they can reclaim for making large donations.
"This will certainly have some impact on donations," Kernighan said. "It’s very difficult to quantify the extent of it, however."