Small Charitable Donations Bill

Gareth Johnson Excerpts

Tuesday 4th September 2012 Commons Chamber

[Gareth Johnson (Dartford) (Con)]

This debate might not be what everyone is concentrating on in Westminster today, but it is nevertheless an important contribution to the parliamentary calendar. Thank you, Mr Deputy Speaker, for the opportunity to support the Bill, which will close the gap that has existed in the gift aid system for too long. The system works well when the identity of the donor is known, but it is, of course, ineffective for small, anonymous donations.

Small, anonymous donations are increasingly important to charities that are trying to raise support during a recession. At present, tin-rattling fundraisers, who often work at the coal face for the charitable sector, could miss out, so I am pleased that that will change under the Bill.

The Bill will provide a dual benefit: it will encourage more people to donate to charities, safe in the knowledge that the tax on their contribution can be reclaimed, and it will encourage more charities to use gift aid. The Bill builds on the principle of gift aid; it does not replace it. I was pleased to hear the Minister reiterate that that principle lies behind the Bill.

The Bill has been introduced to Parliament on the back of a public reading stage. I think I am right in saying that this is only the second occasion on which this form of open government has been practised, the Protection of Freedoms Bill being the first. The public reading showed that there was broad support among the charitable sector for this Bill. The sector wants the proposed changes and recognises the benefits that they will bring.

The Bill will reduce the reliance of the charity sector on so-called chuggers knowing the identity of everyone they approach. At present, they need the identity of every donor in order for gift aid to apply. Once the Bill is enacted, the situation of somebody who rattles a tin will be just as tax-efficient.

The Bill will benefit many small charities that rely on small donations, such as the Arrow riding centre for the disabled in Darenth in my constituency. It relies heavily on volunteers asking for donations at various community events, without ever knowing the identity of many of those who have given small amounts of money to its cause. The Bill deals with that precise situation and will make a genuine difference to the work that small charities, such as the Arrow riding centre, carry out.

We all know the names of various large charities in the UK, but most charities have a turnover of less than £10,000 per annum and they are set to be the main winners. The Bill will also build on the benefits that this Government have given to those who are generous to charities, such as the changes in inheritance tax for charitable donations, which make it far more rewarding for individuals to provide a legacy to charitable organisations. Good government is about supporting those who are doing good things, and this Bill does precisely that.

For any charity law to work, it is essential that it remain as simple as possible, so that safeguards against fraud are in place but volunteers are not put off charitable activities by the weight of bureaucracy that they need to deal with. That is why we need to keep the registration process for gift aid simple. Gift aid has been targeted by fraudsters in the past, so the Bill will require a good track record before the measures can apply.

In conclusion, it makes genuine sense to encourage people to give donations to charity in a simple and cost-effective way that benefits the donor, the charity and the whole of society. The Bill will facilitate that. I therefore hope that it will receive its Second Reading today.