Note - updates in blue! (16 May 2017)
What is Almondsbury Communnity Shop?
Almondsbury Community Shop is a Community Benefit Society, registered with the FCA, and any profits we make must either be invested in running the shop or donated to local causes. Being staffed wholly by volunteers has enabled us to thrive and offer customers good value for money.
As a result our shop has operated profitably every year since opening in 2009. Since then cumulative sales of £1.2m have generated total trading profits of £55,000, of which 60% has been donated to local voluntary or charitable groups and events
Who runs the Shop and the Society?
Members of the Management Committee are elected for a 3 year term by shareholders at the Annual General Meeting. All are unpaid volunteers and some Committee Members have extensive business experience. Investors become full members of our Community Benefit Society where the rule is 'One Member – One Vote', no matter how large or small your shareholding.
What is this investment for?
Funds raised by Community Shares would enable us to purchase the freehold property at 14 Church Road, Almondsbury from which the Community Shop currently operates.
Currently we rent the property from the Parochial Church Council (PCC) and as with most old buildings, it requires regular maintenance and some restoration which we believe we are best placed to arrange. As owners it would be in our interest to ensure that the property is maintained to a high standard, increasing its long term value. Paying interest on shares rather than paying rent makes sense under the circumstances.
Community shares can only be issued by registered Community Benefit Societies such as ours. They enable residents to invest in important local facilities and are interest bearing, non-transferable, withdrawable shares.
Since 2009, 120,000 people have invested more than £100m in 400 similar community schemes. Local examples include Hawkesbury Upton and Oldbury-on-Severn where residents used this scheme to raise funds for their community shops.
Investors would help to secure the long term future of our Community Shop which has become a vital facility since opening in 2009. It is a convenience store to many but also provides a lifeline to those needing more support. It encourages volunteering and has donated over £32,000 to local groups and clubs since 2009.
Community Benefit Societies shares also qualify for Social Investment Tax Relief (SITR) status with UK tax authorities, providing a range of significant personal tax benefits to encourage people to invest in their community.
What's in it for you?
A great opportunity to invest in your community and get a return on your savings !!
- 30% tax relief on your investment to set against income or capital gains tax
- 100% relief from inheritance tax on the shares. In the case of your demise, your shares are exempt from inheritance tax and pass to your beneficiaries outside of your estate.
- 2.5% interest; equivalent to 3.6% after tax relief on your shares; Interest will be paid once or twice yearly at the discretion of the AGM; Rates can increase or decrease and it is likely that the first interest payment will be approved at the Extraordinary General Meeting in June 2017, and approved at each subsequent AGM..
To qualify for tax benefits, you must be a UK income tax payer and hold the shares for a minimum of 3 years. Individual investors should satisfy themselves as to their eligibility for tax relief and more information is available at www.hmrc.gov.uk/eis/
Can anyone buy community shares?
This share offer is open to existing shareholders and residents over the age of 18 living in, working or having a close connection with Almondsbury. Applications will go through a prioritisation process based on residency and links with Almondsbury.
What is the minimum investment?
Our objective is to have as wide a participation from our community as possible so with shares at £2 each, this offer is for a minimum purchase of 10 shares or £20 per person. Amounts over £500 will be eligible for tax relief as above.
Is there a maximum investment?
Shares can be purchased in multiples of 10 shares or £20 up to our agreed limit of £25,000 per person, generating tax relief of £7,500 or £15,000 per tax-paying couple.
When would the investment be needed?
Our current lease expires in February 2018 and we hope to purchase the property on or before then. Our first task is to produce a share offer prospectus providing details of the terms of the share offer. This should be available in May 2017. In order to allow enough time for all residents to appreciate the opportunity fully, the share offer should open in August for a period of 3 months. The subscription period for shares may close early or be extended depending on the take up
What are the risks of buying community shares?
You would be investing in a business with a successful track record and your investment would be backed by a valuable property asset. In the unlikely event that the shop went bust, the property is still likely to retain its value. Your shares cannot increase in value above their original price but, as with all investments, you risk losing some or all of the money you invest. Community shares are not covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service
Can I withdraw my shares?
Shares have to remain invested for at least three years after purchase, plus 3 months' notice. We encourage you to consider your investment as a long-term commitment and be prepared to tie up your capital for a number of years - a one-off investment to generate a long-term financial benefit to you and a lifetime of benefit to the community.
Withdrawals would be funded from trading surpluses, reserves or the sale of your shares and Directors reserve the right to limit or suspend the quantity of shares withdrawn within any 12 month period having regard to the long term interests of the Society and the need to maintain prudent reserves. This limit will be administered in as fair a manner as possible.
How safe is my money?
Your investment will help the Community Shop to purchase the freehold property at 14 Church Road, Almondsbury. Your shares will be backed up therefore by a property asset providing investors with a high degree of security.
Is the Shop financially robust?
Almondsbury Community Shop is a successful business which has made a profit every year since start up in 2009. Winners of a Rural Oscar in 2012, a UK award for Contribution to the Community in 2013 and ranked in the UK's top 100 independent stores in 2015; we have appeared on local and national TV and radio, had feature articles in 'The Grocer' and other publications and most recently appeared in 'Retail News'. Annual accounts are available for inspection along with a Business Plan to 2025. Interest on shares would replace current rental payments and we are confident that we have a stable business and a secure future.
What happens next?
We have opened a register for 'Expressions of Interest' in this offer. Please ensure you put your name down to receive further information. You can do so online here or on a paper form from the shop. Over the coming weeks we shall be producing a share offer prospectus and attending local group meetings to explain and discuss the offer