We have had a constructive and lively debate so far. I welcome the comments of the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) and, in particular, her decision not to press her amendments. I also welcome the comments of my hon. Friend the Member for Amber Valley (Nigel Mills) and his decision not to press his amendment. He has recognised that Government amendment 23 will reduce the matching rate by 10%, which is even more generous than the reduction proposed in his amendment. I cannot promise him that this generosity will continue into next week—we will have to wait and see what happens then—but he does tempt me.
I will say a few words about why the Government have brought forward these amendments. Although some hon. Members wanted to remove the matching rate altogether in Committee, I understand that they accept that the Government have listened and that a 10% rate is much more generous than what was offered when the Bill was first introduced.
Let me say explain why we have this matching provision. HMRC sees even the 10% rate as an act against gift aid fraud. Unfortunately, there are unscrupulous individuals who want to misuse charitable tax reliefs. They defraud the taxpayer and undermine the good name of the charitable sector, so we must be in a position to protect the taxpayer and the charitable sector. The lack of records also means that HMRC would have less evidence when a charity is claiming correctly under the scheme if there was no kind of matching principle. Gift aid is the closest proxy we can use to help ensure compliance under the new scheme, and the matching requirements will significantly increase protection against fraud and abuse.
Government amendment 30 introduces a wide-ranging power that will allow us to reduce or increase the matching rate. It will allow us to remove the matching provision entirely or reinstate it at a later date if it is removed. Removing the matching provisions altogether would remove the need for charities to claim a set proportion of their small donations claim in gift aid in that year. Even so, charities would always need to claim some gift aid in each year to ensure that they can claim under the scheme. That is because of the provision in clause 1(1)(b). That helps to retain the important link between this scheme and gift aid.
Any use of that power would be through the draft affirmative procedure, so it would be consulted on and subject to a debate in this House. That power means that the matching rule is fully flexible. We have no intention of using the power in the near future, but it will be there if we need it. It is something that many charities have asked us to introduce, so I am pleased that we have been able to do so. I believe that the
Government’s approach is better than some of the other amendments that have been tabled, as has been recognised in the comments we have heard.
We debated the community buildings rules in some detail in Committee so, unless hon. Members have questions, I do not propose to go into much detail now, but I would like to remind Members that the purpose of those rules is to recognise that not all charities are structured in the same way. There are charities that, because of the way they were set up or for other reasons, effectively operate as branches of a master charity. We want to ensure that the proposals are as fair as possible and that branches of a bigger charity are effectively treated as individual charities and have their own £5,000 limit. The purpose of the community buildings rules was not to give more than £5,000 by allowing charities to have multiple claims, and I believe that the changes we are making to the Bill will achieve that effectively.
I again warmly welcome the support the House has shown for the Government amendments and thank the hon. Member for Kilmarnock and Loudoun for looking at them carefully and not pressing her amendments. I commend amendments 23 and 30 to the House.