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HMRC internal manual

Community investment tax relief manual

Accreditation of community development finance institutions (CDFIs): Retail community development finance institutions

ITA/s340; SI2003/96 Schedule 1 (11)

CDFIs provide funding to enterprises in under-developed areas in two ways:

* directly, by financing individual enterprises in or for disadvantaged communities, OR
* indirectly, by investing in businesses which themselves fund enterprises in or for disadvantaged communities

CDFIs applying for accreditation are asked to say whether they are applying as retail CDFIs, that is, as a CDFI whose principal objective is to finance trading enterprises directly. If so, and if successful, the accreditation notification specifies that the body is accredited as a retail CDFI.

Any CDFI that is not accredited as retail CDFI is a wholesale CDFI.

The distinction between retail and wholesale CDFIs is relevant because in some cases the CITR scheme rules provide for different treatment of the two types of body. See:

  • CITM3040 - Investments which are not relevant investments
  • CITM4070 - Limit of issue of tax relief certificates