Small Charitable Donations and Childcare Payments Bill — House of Commons, 2016-10-11
Topic: Law and Crime
Robert Owen Biggs Wilson (Conservative, Centre-right): I want to stay on the subject of fraud, because we must guard carefully against it in the legislation. It might sound as though we are opening up quite small pockets of money, but when we put them all together, they add up to a much bigger total. The figures relating to the gift aid small donation scheme are not available in isolation. However, it is an unfortunate fact that unscrupulous individuals seek to exploit charitable status for criminal purposes. In May this year, three individuals were jailed for a total of 22 years for defrauding HMRC of £5 million in fictitious gift aid claims. In April this year, three individuals were jailed for a total of 11 years for submitting fraudulent gift aid claims totalling £340,000. In January this year, two individuals were jailed for a total of five years for attempting fraudulently to claim £500,000 in gift aid from HMRC. That is a really important point to make. We must make sure that this small donations scheme is not open to fraudulent activities. The Bill removes two of the existing eligibility criteria that help HMRC to assess compliance with the wider gift aid scheme—the two-year registration requirement and the gift aid history requirement. The Government initially consulted on relaxing the gift aid history requirement to only one year rather than two. However, after listening to the views of the sector we have taken the decision to remove that requirement entirely, which is a significant simplification for charities. It is therefore necessary to retain the match-funding rule as a means of protecting the integrity of the scheme. As the Financial Secretary said in her opening comments, the scheme was always intended to be linked with the wider gift aid scheme, and the Government made that clear in 2012 and that remains the case today It is important to be clear that the gift aid matching requirement is not intended to disadvantage smaller charities. That is why the rule is progressive and is set at a modest ratio of 10:1. This means that a charity needs only to claim gift aid on donations of £10 to gain a small donations scheme allowance of £100. To benefit from the maximum small donations allowance, a charity must collect gift aid donations of just £800. Most would see that as a reasonable position to take. Requiring charities to match a proportion of their small donations with a small amount of gift aid donations incentivises charities to maximise their gift aid claims Unlike the small donations scheme, gift aid relief is not capped, relief can be claimed on donations of any size and it is not limited to small cash donations. Furthermore, the process of obtaining a gift aid declaration allows charities to develop ongoing relationships with their donors and can lead to a more resilient funding stream in the longer term. In terms of awareness for charities as well, the Government have funded the small charities fundraising training programme, which is worth more than £100,000. The Government appointed the Foundation for Social Improvement in partnership with the Small Charities Coalition and GlobalGiving UK as training providers to help charities with an annual income of up to £1 million to fundraise much more effectively than they have done in the past The hon. Member for Clwyd South asked why the matching ratio was set at 10:1. During the passage of the Bill in 2012, the matching rule was originally set at 1:1, but that was reduced to 10:1 after listening to representatives from the sector My right hon. Friend the Member for Meriden asked about gift aid and SMS donations. SMS text giving is a really easy way for donors to give to charity. Donors simply send a short code to a six-digit number to donate a set amount via their phone bill. There is an established process for donors’ gift aid SMS donations. Following the initial message, a reply is sent to the donor thanking them for their donations and asking for their name, house number, postcode and confirmation that they are a UK taxpayer. If the donor replies with that information, gift aid is added to the donation We also had a question about why cheques were not allowed. The aim of the gift aid small donations scheme is to allow charities and community amateur sports clubs to claim a gift aid style payment on cash donations received in circumstances where it is difficult or impractical to collect donors’ details. Giving by cheque means that the donor is giving their details to the charity and the extra amount of information needed to make a gift aid declaration is therefore relatively small. If it is practical for a donor to write a cheque, it seems reasonable to assume that it is practical for a donor to make a gift aid declaration I will briefly cover contactless debit and credit cards, because those donations face the same fundamental problem—a lack of opportunity for charities to stop and engage with their donors. Anyone who has passed through a tube station ticket barrier at rush hour will be able to attest to the speed of contactless technology, allowing individuals to tap their card to pay and walk through without breaking their stride I am very grateful to representatives of Cancer Research UK who took the time during the Government’s recent consultation to demonstrate a prototype contactless donation terminal currently being piloted by a number of large UK charities. These terminals, which are set to fixed donation amounts, allow individuals to donate quickly and easily in a similar way to donating cash. Extending the small donations scheme to include these types of donation will future-proof the scheme, allowing more charities to benefit as the technology becomes widely available We had a fairly lively discussion about the cost of child care and the importance of Government support for hard-working families. I hope that we can all agree that the amendments within the Bill are positive, making it easy for parents to access help with the cost of child care. I also hope that my right hon. and hon. Friends from all parties in the House can join me in welcoming the imminent introduction of tax-free child care. This new scheme will provide much-needed support with child care costs for the first time to working parents who are self-employed as well as those who are employed The Bill will make the gift aid small donations scheme more flexible and generous so that it can benefit a greater number of charities and donations. It will also make it easier for parents to access tax free child care. It is good news for civil society and good news for working parents, and I hope that all hon. Members will join me in supporting it. It is a Bill to make life simpler and easier for charities and working parents, and I commend it to the House Question put and agreed to. Bill accordingly read a Second time. Small Charitable Donations and Childcare Payments Bill (Programme) Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the following provisions shall apply to the Small Charitable Donations and Childcare Payments Bill: Committal The Bill shall be committed to a Public Bill Committee Proceedings in Public Bill Committee Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 18 October 2016 The Public Bill Committee shall have leave to sit twice on the first day on which it meets. Proceedings on Consideration and up to and including Third Reading Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading Other proceedings Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Jane Ellison.) Question agreed to. Small Charitable Donations and Childcare Payments Bill (Money) Queen’s recommendation signified. Motion made, and Question put forthwith (Standing Order No. 52(1)(a)), That, for the purposes of any Act resulting from the Small Charitable Donations and Childcare Payments Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Jane Ellison.) Question agreed to.