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HMRC internal manual

Community investment tax relief manual

Accreditation of community development finance institutions (CDFIs): Withdrawal of accreditation - investment fund limits

SI2003/96 Regulations 15 & 15A-E

Accreditation as a CDFI is conditional on the accredited body investing specified proportions of its investment fund within defined time limits (see CITM3005).

Where the CDFI fails to satisfy these conditions its accreditation is withdrawn with effect from the time of the failure.

But accreditation is not withdrawn if, on application, the Secretary of State is satisfied that:

  • the failure to meet the required onward investment levels was a result of circumstances outside the control of the CDFI (or persons connected to it), and
  • the CDFI took reasonable steps to try to avoid the failure and to mitigate the extent of the failure.

The procedures to be followed by CDFIs that either expect to fail, or actually have failed, to meet the onward investment requirement and would like the Secretary of State to consider its circumstances are set out below.

There is no obligation on a CDFI that anticipates a failure to meet it onward investment requirements to apply to the Secretary of State in advance of the failure occurring. But early applications to, and decisions by, the Secretary of State may give CDFIs (and their investors) comfort that proposed measures to avoid or mitigate the failure are regarded as reasonable.

All applications should be made to BEIS - see CITM2010. If any application by the CDFI contains insufficient information for the Secretary of State to make a decision he seeks further information from the CDFI.