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HM Treasury deals new tax blow

Community renewable projects to be excluded from tax relief

HM Treasury deals new tax blow image

The UK government has announced that community energy projects will be excluded from the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) from next month.

HM Treasury said projects will be stopped from 30 November this year, adding that community schemes will also be prevented from getting Social Investment Tax relief (SITR).

The announcement - made by the Financial Secretary to the Treasury in Parliament during the report stage of the Finance Bill on Monday - means that community energy organisations which benefit from subsidies for the generation of renewable energy will no longer be eligible for any tax-advantaged investment for investment made on or after the November date.

Share offers will need to be closed and shares issued by 30 November 2015 for investors to qualify for the relief – even where investments have received advance assurance.

Industry has since slammed the move as "yet another blow" to the renewables sector.

A Regen SW spokesperson said: "For the government to put through a policy change with so much impact on the community sector so quickly with so little discussion is, at best, deeply disappointing.  Regen has asked the Treasury for an explanation and is already in contact with our partners to consider the potential for lobbying.

"This is clearly a major blow for the sector, particularly to groups who are already planning share offers. There has been no prior warning of this policy change and no explanation of why the government has decided take this step."

Image: Wikimedia Commons

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