Small Charitable Donations and Childcare Payments Bill — House of Commons, 2016-10-11
Topic: Social Welfare
Jane Ellison (Conservative, Centre-right): I have already mentioned HMRC’s outreach work, which I will certainly be encouraging. More promotional opportunities are planned, and I know that the Minister for Civil Society will say more about that at the end of the debate. It is a fair point and we want to make it easier, but obviously there are people who just do not know about this and still perceive barriers, so everything we can do to challenge that is welcome. We are extremely keen to hear thoughts from across the House on how we can do that, so we are always listening. I am very happy to put those suggestions to HMRC, and I know that my ministerial colleague will be happy to consider that in his Department as well Let me clarify the anomaly and how we are addressing it. The anomaly in the original legislation allows some charities to claim more than others, based only on how they are structured. The Government welcome the supportive and constructive approach adopted by the Church of England, the Roman Catholic Church and other religious groups during the recent consultation on the change The Bill also considerably relaxes the rules on where charities can receive donations that are still eligible for the gift aid small donations scheme. Currently, the scheme’s so-called community buildings rules mean that charities can claim top-up payments only on donations received during charitable activities that take place within the community building. However, we know that many local charities, although based in community buildings, carry out most of their activities in the local community, away from the building itself, which means they are unable to benefit fully from the small donations scheme. The Bill therefore relaxes the rules to allow charities based in community buildings to claim top-up payments on donations received outside the building but within the local community area. Colleagues will be delighted to know that, among the many small, local civil society groups, the scouts and guides, the air and sea cadets and other local uniformed groups, in particular, will benefit significantly from this change and will be able to receive the support they deserve for the vital work they carry out in our communities Taken together, this package of reforms has the potential to provide a real boost to many charities, particularly the up to 9,000 new charities that apply for recognition by HMRC each year. Based on provisional estimates, these changes are expected to benefit charities by £15 million a year, a significant increase that underlines the Government’s commitment to supporting a greater number of charities and a greater number of donations. The final figures will be certified by the independent Office for Budget Responsibility as part of this year’s autumn statement So far I have talked about the changes that will further support our charities. Let me turn briefly to the tax-free childcare aspects of the Bill, which will help us ensure that it is easier for hard-pressed parents to receive the support they need. In the previous Parliament we legislated to introduce tax-free childcare. That will provide up to £2,000 of Government support for childcare costs per child a year, which parents can use with any childcare provider they choose. The idea is that they can simply apply online to open an account for each child, and that for every £8 a parent pays in, we will pay in an additional £2. The system will be trialled later this year and then gradually rolled out to parents from early next year During our user testing of the system to date, we have found a couple of minor technical issues that we need to resolve in order to make it as straightforward as possible for parents. The Bill therefore makes two minor technical amendments to ensure that the scheme operates as intended. The first technical change relates to the duty of parents to confirm that they remain eligible to receive tax-free childcare each quarter. The Bill will allow greater flexibility over when parents are asked to make this confirmation. It will mean that once a quarter parents can confirm their eligibility for all their children at the same time, rather than having to do it separately for each child if they registered them at different times The second technical change will mean that parents can use a standard online form if they want to query a decision. That will make the process much more straightforward and convenient. We still want to ensure that everyone can ask for a review, so anyone who would struggle to get online will still be able to raise their queries in other ways.