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New Clause 1 - Annual report

Part of Small Charitable Donations Bill – in a Public Bill Committee at 4:15 pm on 30th October 2012.

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Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury 4:15 pm, 30th October 2012

I take this opportunity of discussing the new clauses tabled by the Opposition and to thank them for their contribution to the debate. On Second Reading, they said that they would be supporting the Bill in principle, but would be providing constructive scrutiny. Those on the Opposition Front Bench have done that admirably throughout our proceedings, as have other members of the Committee, and have done a good job in bringing up issues and asking questions, which I shall try to answer.

I will be upfront with the hon. Member for Eton, West—sorry, Mr Robertson, I mean Harrow, West. I do not know why I said “Eton”. For some unexplained reason, it has been mentioned so often in Committee. Such places have two great public schools, one of which I am sure that the hon. Gentleman represents well.

I shall not be supporting the new clause. Before I set out my reason why, I wish to tackle the charge made indirectly by the hon. Gentleman that I have dismissed every proposal out of hand. I reassure Opposition Members that I have considered with care each amendment and new clause they have tabled. They will remember my saying that I will consider again the level at which the matching rate is set, following their amendment to clause 1. Will they also note the range of amendments that I have introduced to the Committee, many of which were in specific response to the arguments advanced by hon. Members on both sides of the House on Second Reading? For example, several hon. Members drew attention to their anxiety about the single shared trustee connecting two otherwise unrelated charities. I tabled an amendment on that matter. Mention has also been made of the difficulty that excluding commercial buildings from the community building rules would create for some charities, so we have made changes to reflect that view.

The hon. Member for Kilmarnock and Loudoun asked whether charities that merge can continue to be eligible for the scheme. We had a good debate about that earlier, as the Government had tabled an amendment to deal with that issue. The hon. Member for Foyle drew attention to his worry about charities that had received penalties, but had them suspended or repealed. We also tabled an amendment to take account of that. The Government cannot be accused of not listening to Opposition Members and charity representatives on the Bill.

I am opposing both new clauses not because I do not want such information to be in the public domain, but because we are already doing much of what they ask and it would not be a good use of civil servants’ time to duplicate such work. Let me start with the annual report. HMRC publishes national statistics on the cost of the various charitable tax reliefs three times a year. When the scheme is up and running, HMRC will include the cost of the gift aid small donations scheme in those regular publications, following the practice established for transitional relief. Those figures will be national statistics. I have said before that HMRC does not publish the details of fraud rates in particular schemes or tax reliefs. That would be tantamount to advertising them to fraudsters, so I cannot give a commitment to publish such information. It is not necessary to provide an annual report to Parliament. All the information that the hon. Member for Harrow West has asked for and that HMRC can reasonably publish will be published. Interested members of the Committee will be able to find all the relevant information on the HMRC website.

I move on to the review of the scheme, which the hon. Gentleman says should take place two years after the legislation comes into force. I have said a number of times during our debates on the Bill that we are committed to undertaking a review of the scheme three years after it has started. Three years will be enough time for the scheme to get up and running, and for charities to learn about it and get used to claiming under it. Any less time than that would mean that we would be undertaking a review that would not be representative of the scheme, as the scheme would just be starting up. A two-year review would be premature.

However, I do not want hon. Members to think that the scheme is going to start on 6 April next year and that no one will look at it for three years until the review happens. HMRC continually engages with charities; staff on the helpline will be speaking to charities probably every day about their experience of the scheme; and outreach and audit teams will be visiting charities, and hearing what they are saying about the scheme. In addition, HMRC has a charity tax forum that brings together a wide range of charity representatives every quarter to discuss all matters relating to HMRC’s interaction with charities. The forum has been discussing the scheme since it was first announced in March 2011, and it has a working group to discuss the scheme in a more detailed way. The forum will share experiences of the scheme as it beds down and it will identify areas for improvement.