Income Tax Act 2007 section 257QS

Relief subsequently found not to have been due

Section 257QS deals with the withdrawal of social investment (SI) tax relief where it is later discovered that the relief was not properly due to the investor.

• Any SI relief that an investor has received which is subsequently found not to have been due must be withdrawn.
• Where the reason for withdrawal is that the social enterprise failed to meet the conditions in Chapter 4 of Part 5B, a specific notice procedure must be followed before relief can be taken back.
• The notice requirement is satisfied either if the social enterprise itself has reported relevant information to HMRC under section 257SF, or if an HMRC officer has issued a notice to the social enterprise stating that all or part of the SI relief was not due.
• This procedure ensures that the social enterprise — rather than individual investors — is the party involved in any dispute, which simplifies matters where there are many investors and where the relevant evidence lies with the enterprise itself.