Schedule 1

Part of Finance (No. 2) Bill – in a Public Bill Committee at 11:15 am on 19 October 2010.

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Photo of David Gauke David Gauke The Exchequer Secretary 11:15, 19 October 2010

I appreciate that this is a probing amendment, and I am sure that I can provide the reassurance for which the hon. Gentleman is looking. Amendment 1 would remove subsection (6) of proposed new section 804A of the Income Tax (Trading and Other Income) Act 2005, as introduced by schedule 1 to the Bill.

The new section deals with the placement cap, which focuses the relief on small-scale arrangements by limiting the availability of the relief to arrangements where no more than three people are cared for at a time. Subsection (6), which covers siblings, qualifies the terms of this limit so that if a carer provides shared lives care for a family group, that will not automatically mean that the placement cap is exceeded. It achieves that by treating siblings as if they were one person for the purposes of establishing whether the placement cap has been exceeded. Without subsection (6), a carer looking after four siblings would exceed the placement cap. This subsection therefore preserves the entitlement to relief in those circumstances.

The hon. Member for Nottingham East rightly said that it would be regrettable if there was a disincentive to keep families together. The provision ensures that families can be kept together. It is worth noting—this might be the hon. Gentleman’s concern—that siblings are not treated as one person when determining the amount of relief available to the carer. For these purposes, the carer would treat each sibling as a separate person for whom qualifying care was provided so that the appropriate amount of relief could be calculated.

I understand that the Opposition want to ensure that there is fair treatment for carers, as we do, but I think that they might have misunderstood the purpose of subsection (6). It does not penalise carers; quite the contrary, it ensures that the placement cap, which affects the relief that they receive, is not exceeded should carers look after siblings. I hope that that explanation is satisfactory to the hon. Gentleman and that he will withdraw his amendment.