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How to make the most of your tax allowance

6th January 2016 By Katy Ford in Membership, Tax Relief

How to make the most of your tax allowance in 2016

Want to claim 25% tax relief over 5 years? Read on …

Happy New Year! A leap year too and here at Foundation East we are very pleased to have an extra day in the calendar with which to deliver the important work we do.

This being so, I thought I’d kick 2016 off with a call to arms to anyone looking to reduce their tax liability yet invest for good this year. First though, let me share with (or remind) you what Foundation East does, why we do it and what’s in it for you…

 What is Foundation East?

 Foundation East is an FCA registered Mutual Society, a Responsible Finance Provider in which people like you can invest your money safe in the knowledge that you are enabling significant social and economic benefit to be created in your local community.

 Why? Because we use your investment to provide loans to entrepreneurs who have been turned down by banks and other mainstream financial institutions, despite having viable business plans.

 Whilst we turn away more business plans than we support (it would be wrong to lend to someone with a flawed plan), those that we do support often go on to make hugely positive impacts within the communities they operate, as these success stories demonstrate. Indeed, when you take into account the outcomes and ultimate impacts resulting from lending to and supporting financially excluded small businesses, Foundation East generates an average social and economic return equivalent to £15.68 for every £1 spent providing the service.

 Don’t believe me? Find out more by reading our social impact reports, and  subscribe to our newsletter as I will be sharing how we achieve such a return in more detail later on in the month.

 Why is Foundation East important?

 Self-employment or setting up a small business is the only way to escape from joblessness or hardship for an increasing number of people. Yet securing the start up finance needed from mainstream institutions can be extremely difficult.. Even when entrepreneurs do find start up finance, many experience financial pain as their businesses grow, often finding themselves pushed out of business prematurely or forced into borrowing from less than responsible lenders.

 Foundation East offers a responsible alternative.

 And it’s not just entrepreneurs who benefit from our support. The communities they live in around eastern England do too. As I have already mentioned, we deliver an average of £15.68 social and economic value for every £1.O0 we spend on delivering the lending and business support service.

 What can Foundation East do for you?

 We can give you a real opportunity to help local budding entrepreneurs get started and grow, whilst delivering significant social and economic value to your local community. We can also offer you the opportunity to claim 25% Community Investment Tax Relief (CITR) over a period of five years. Yes – 25%! If you invested £10,000 you would be getting £2500 of tax relief!

 To summarise, every penny you invest in Foundation East is loaned to financially excluded small businesses located in the eastern region of the UK.  The social and economic benefits of investing in Foundation East shares include:

For the economy

For you

For your company

Safeguarding existing jobs

Feelings of personal fulfilment through giving something back to the community

Helps to meet corporate social responsibility (CSR) policies

Creating new jobs

Directly supporting the development of local businesses

New business development opportunities with our client base

Reducing social security payments

5% per annum tax relief if investing in CITR shares

Directly supports development of local businesses

Increasing economic productivity

Non- executive director opportunity, and other personal development and CV enhancement opportunities

Non- executive director opportunity, and other personal development and CV enhancement opportunities

Increasing taxes being collected

Regular updates, including newsletters, annual review and social impact reports

Promotion of your business on our web site and marketing collateral

 

Networking opportunities with like-minded individuals

Regular updates, including newsletters, annual review and social impact reports

 

 

5% per annum tax relief if investing in CITR shares

 

 Other investment options are available to you of course, as no doubt your advisors will suggest and which for your convenience, I compare in the table below.

 

Seed Enterprise Investment Scheme (SEIS)

Community Investment Tax Relief (CITR) through Foundation East

Social Investment Tax Relief (SITR)

Level of Risk

High

Low

Medium

Type of Investors

Individuals only

Individuals and corporate entities

Individuals only

Beneficiary investees

Qualifying High Risk small companies

Small businesses unable to access mainstream finance

Qualifying Social enterprises

Minimum investment period

3 years

5 years

3 years

Tax Relief

50% of cost of shares

25% of investment made

30% of investment made

If £20k was invested your tax liability would be reduced by ……..

£10k

£5k

£6k

Investor motivation

Financial

Social

Social

 As a Responsible Finance Provider (formerly referred to as a Community Development Finance Institutions (CDFI)) Foundation East is a wise investment, as existing investors know. With a recent report evidencing that the demand for responsible finance grew by 30% in 2015, I’ve a strong feeling that responsible finance provision will receive more and more mainstream attention this year. Indeed, we hope to share breaking news soon, so  subscribe to our newsletter to ensure you don’t miss out. And please do become a member or get in touch if you, like us, believe in creating opportunity for all.

 

  • About the Author
    Katy Ford

    Katy Ford

    Working for Foundation East since its inception in 2004, Katy became Chief Executive in 2009. She had previously held the position of Treasury Manager for a large insurance company. In this role, she was responsible for developing and maintaining relationships with banks and investment houses on behalf of corporate clients, as well as the treasury team. Before this Katy ran a small hotel, an experience that enables her to understand the challenges faced by Foundation East’s SME clients.