On 23 August 2016 HMRC provided Micro Rainbow with an advanced assurance that social investments in Micro Rainbow to raise funding for its housing project for lesbian, gay, bisexual, trans and intersex (LGBTI) refugees should qualify for the Social Investment Tax Relief (SITR) scheme.
LGBTI refugees face huge challenges with mental health and social integration because they often suffer from severe abuse within supported accommodation. For the first time LGBTI refugees will benefit from having a suite of dedicated services that will enable them to integrate fully and more quickly into society.
The hostel will not only reduce the likelihood of LGBTI refugees experiencing abuse but also the related mental health problems that often go hand-in-hand.
“What makes our project pioneering is that Micro Rainbow will also offer the users of our hostel opportunities for employment, volunteering and professional skills training as well as providing a range of social inclusion activities and life skills training. One of our core aims is to enable our service users to integrate and contribute to the wider society and accordingly to better manage the past trauma that they may have experienced. Our hostel is the centerpiece of this project and will allow us to offer the other crucial, ancillary services. I wish I had access to this project when I became a refugee myself”
said Moud Goba, Micro Rainbow’s Project Manager.
Following receipt of HMRC’s advanced assurance, Micro Rainbow will now enter the second phase of its innovative project, raising up to £500,000 in social investment.
“The SITR scheme allows qualifying individuals not only to invest in, and receive returns on, a qualifying high impact social project, but also provides that certain tax relief may be claimed by those individuals on or in respect of their investment (such as deduction of 30% of qualifying investment costs from that investor’s income tax liability or deferring a capital gains tax liability on a gain re-invested into a SITR qualifying investment)”
said Sebastian Rocca, Micro Rainbow’s Founder and CEO.
Mr Rocca added:
“This is a ground-breaking and innovative project that will disrupt the way that social change happens. The best types of social innovation reward multiple stakeholders and beneficiaries. Our project will do just that. It will create win-win scenarios for our target group, our social enterprise, the private sector, the government, and the wider community. Our model ticks all these boxes”.
The leading, global law firm Weil, Gotshal & Manges provided Micro Rainbow with pro-bono legal advice in relation to the form and parameters of the proposed investment and the application to HMRC for SITR advanced assurance in respect of Micro Rainbow and the investment. David Irvine, Partner Weil, Gotshal & Manges, said:
“We are delighted that advanced assurance has been provided and we look forward to assisting Micro Rainbow in the development of a much-needed project. It is very rewarding to assist social enterprises with accessing forms of investment similar to those available for private sector projects, as a means to pursue growth and success and we wish Micro Rainbow the very best for this project”.
Micro Rainbow’s project (“Safe housing for LGBTI refugees”) was recently selected from over 1,000 ideas as one of the semi-finalists of the EU Social Innovation Award. The winners, who will be announced in October, will each receive a €50,000 prize to turn their ideas into reality and support the integration of refugees and migrants in the EU.