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Changes to the dividend and interest caps
The regulator received responses from a wide range of stakeholders. A list of respondents can be found in Annex B. This response document summarises the main issues raised by respondents under the consultation questions and outlines the regulator’s response to these. We hope that you will find the report of interest and if you wish to provide feedback please contact the regulator.
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In 2009 the Regulator of Community Interest Companies (CIC) Sara Burgess undertook a review of the CIC dividend and interest caps on investment. This consultation which canvassed over 3,000 CICs and key professional and representatives bodies concluded that the dividend and interest caps were unduly complicated and restrictive. From the results gathered the Regulator made a number of changes in 2010; raising the dividend and interest caps and making the process simpler by removing the reference to the Bank of England base rate’. The Regulator also stated that she would return to the subject in 3 years time.
In November 2012 the CIC Association in partnership with with the CIC Office ran a survey which gave an opportunity for every community interest company (CIC) by shares and guarantee to comment on the dividend and interest caps.
The CIC Association prepared a report on its findings, which was presented to the Technical Panel in February 2013. This concluded access to investment remains an issue and that the changes the Regulator Sara Burgess made in 2010 to the dividend and interest caps did not result in increased take-up of the CIC limited by shares model.
On 6 June 2013 the Prime Minister launched the consultation at the G8 Social Impact Investment Forum in London.
The CIC Regulator Sara Burgess is particularly interested in your views on the dividend caps in place and barriers to investment for CICs and hopes you take the time to respond.