Siop Gymunedol / HAVARDS / Community Shop
This page contains more information about the project and about the investments you can make to assist.
In early 2022 we ran a community survey, which demonstrated huge evidence of community support for the project. Almost 200 people returned our survey form (either online or in writing) and of those 97% were fully supportive of the project. 5% of responses were "maybe" and noone was opposed. The survey also produced 67 offers of help. Many thanks to all who completed this survey, which has provided valuable information and ideas for us. One other benefit is that we now have evidence to show potential grant providers that this is truly a venture wanted by the community for the community.
You can still invest in Havards - see our INVEST page. Although the shop has now been purchased, it is still possible to purchase shares and become part of this exciting venture. Your share holding will help us to upgrade the shop and adapt further to community requirements. This will assist improve the shop to its full potential and ensure the business is a success. We aim to continue to maintain and improve it as a successful trading post serving both the local community and visitors to the area. So you can become a full member of the society, or you can also sign up to volunteer, Help us by becoming part of this exciting venture.
Havards is a profitable business. In return for your financial support, you will receive a return on your investment, when profits allow. More than that though, we are confident that when you visit you will be rewarded by an open, friendly, warm and welcoming shop that lies at the heart of its community and reflects all those who live in Tydrath and the surrounding area.
Inside Havards - an Aladdin's Cave!
Shares are sold to individuals, companies and interested parties at £1 each with a minimum holding of 200 shares and a maximum which is 10% of the total share capital raised.
We would like to ensure that no-one is excluded from becoming a shareholder and member of this Community Benefit Society and therefore provision has been made for those who would prefer to slowly build up a holding. This is the Share Save scheme. Details are on the INVEST page.
Interest: Our intention is to pay interest, and shareholders will be able to opt for one of 3 tiers of interest – 0%, up to 2% and up to 4%. You might want to consider opting for 0% interest if you want to support the enterprise and maximise distribution of funds to the community. Those opting for 2% interest will receive 50% of the value awarded to the 4% interest group at the AGM. You will be making a greater contribution to the community by opting for the lower rate. The maximum interest payable is 4%, but it may be less and will be dependent on trading and reserves.
After completion of two full years of trading, and if the business is running successfully and has sufficient surpluses, we plan to pay annual interest on members' shares. The Board will submit a recommendation regarding interest payments on shares for the approval of the Annual Members’ Meeting. Small payments of interest under £10 may be made through vouchers redeemable in the Havards.
Irrespective of your shareholding volume it will be on the basis of one member, one vote (not one vote per share).
(We have removed the section on how you funds will be refunded if the purchase cannot be made).
What is a Community Benefit Society?
A Community Benefit Society (CBS):
- Must exist to benefit the community
- Can raise funds by issuing shares and seeking loans.
- As a corporate vehicle, it limits liability of its members to the share capital they hold in the society.
- It protects directors from personal liability for acts carried out within their powers or the law.
- It must reinvest any profits back into the business to benefit the community it is set up to serve.
- If its purpose is exclusively charitable, a CBS can apply to HMRC for recognition as a charity and, if accepted, may enjoy the same tax benefits as registered charities (but without being subject to regulation by the Charity Commission). It does not have to apply to the Charity Commission.
- A charitable community benefit society must have an asset lock. This is a rule stating that if the society is dissolved, any residual assets must be transferred to another charity with the same or similar charitable purposes.
- The Charity Commission has acknowledged that charitable CBSs may issue community shares and pay members interest on share capital, subject to conditions. These include reporting to the Inland Revenue where interest paid to one person exceeds £250, and deducting income tax paid to overseas residents.
- After trading for 4 months, an eligible CBS can apply to HMRC for qualifying investors to receive 30% tax relief on share purchases and loans.
When and how can I sell shares?
Shares: Shares must be sold back to the CBS at the issue price. Shares must remain invested for a minimum of 3 years in order to get tax relief. We plan to offer to buy back shares, if asked, once the Community Benefit Society (CBS) is operating profitably, subject to FCA rules.
How will I get SITR? (Social Investment Tax Relief)
UPDATE (16th June 2023): We finally received the necessary approval from HMRC, and have sent out SITR Compliance Certificates to all eligible investors. The certificates could not be issued earlier as the rules relating to this tax relief meant we were not able to apply for the final approval until we had been trading for four months. Once the four months were up, at the end of March 2023, we immediately applied to HMRC, but the approval process took some time. Please note that only those investors who had paid in full by 8th August 2022 will have received SITR certificates (as we had reached the amount available at that time.) Some investors bought shares before 8th August requesting SITR. They then made an additional investment at a later date. Only the first purchase is eligible for SITR.
If you are an investor and think you may have been eligible for SITR but have not received your certificate, please contact us by sending an email to email@example.com
If you have received a SITR3 certificate from us, then in order to make a claim for Income Tax or other reliefs, please read the notes below.
UPDATE (8th August): HMRC has given us advance assurance status, but made the stipulation that only the first £300,000 is available. We have now reached this limit. We regret that new investors and investors who were not fully paid up on 8th August will not be eligible for SITR, as this is on a first paid basis. However, this is still an attractive investment as you can request up to 4% interest. Investors who requested SITR and who had paid prior to 8th August are eligible to receive SITR subject to final HMRC approval.
The Havards Project gained advance assurance status for social investment tax relief (SITR) from HMRC. This means that HMRC are happy that we meet the criteria for SITR and should give us full certified SITR status 4 months after we start trading. Thus investing in Havards should give you an excellent return. In addition to the annual interest that you can gain on your investment, if you have chosen it, the following benefits come from SITR:
- a reduction of 30% of your investment in your income tax bill for that year. Shares have to be kept for 3 years.
- a deferral of a Capital Gains Tax charge if you reinvest the profits into a social enterprise.
Note that investments must be for at least three years to qualify for SITR. We have been given advance assurance status for up to £300,000 of investments.
- Once we have traded from Havards Community Shop for a period of four months we will apply to HMRC for Social Investment Tax Relief (SITR).
- Once granted we will be sent compliance certificates (form SITR3) and a unique investment reference number to give to investors. Investors will be able to use these to apply for tax relief.
- Investors are able to claim the relief up to 5 years after the 31 January following the tax year in which the investment was made. The relief will apply to the tax year of the investment.
- Example: If an investor invests £1,000 then they would, in due course, receive tax relief of 30% which is £300. This means that an investment of £1,000 will, in effect, only cost the investor £700. Investors receiving SITR must be UK tax payers, paying sufficient tax.
- Capital Gains Tax deferral – if a chargeable gain is re-invested into a SITR-qualifying investment, the CGT liability on that gain is deferred until the SITR investment is disposed of. Thus, if you have made a capital gain which exceeds your allowance for the year, then by investing some or all of that gain, you can defer the tax, or avoid it altogether. The tax is still due, but in the year you sell the shares, by which time you may be able to use your tax-free allowance to offset some or all the tax.
- More information can be found in this fact sheet about SITR.
More about how to claim SITR
- You will need the SITR Compliance Certificate which has now been sent out.
- Then, to make a claim for Income Tax or other reliefs, please follow the notes in form SITR3 which you should have received.
You can download an uncompleted form from our website at https://siophavards.cymru/docs/SITR3-Certificate-v1.0.pdf
- In summary you can claim Income Tax Relief either by contacting your tax office and asking for your tax code to be adjusted, or you can use the form SITR3 (Claim form) to claim the tax relief as part of your tax return. If your tax code is adjusted you still need to submit a self-assessment tax return which shows the relief claimed.
- It is your responsibility to ensure you comply with the requirements defined in the form, and to submit your tax claim.
- You should contact your own tax advisor for help in submitting claims, not SHGT.
- This detailed guide for investors claiming SITR is helpful. https://getsitr.org.uk/sites/default/files/2020-06/How-to-claim-SITR-investors.pdf
- Please read our disclaimer below. It is up to each investor to ensure they comply with the SITR rules when making a claim.
What is the risk?
Please note that Community shares are at risk and you could lose some or all of the money you invest. You have no right to compensation from the Financial Services Compensation Scheme, nor any right of complaint to the Financial Ombudsman Service.
PLEASE NOTE: The directors and committee members are not financial advisors nor qualified to offer financial advice. The above notes should not be relied upon to make an investment decision; you are strongly recommended to seek financial advice from your qualified financial advisor for your specific circumstances.