The new clause is designed to exempt scouts, guides and military cadet groups from the connected charities provisions of this Bill. We believe the new clause is not necessary.

The connected charities rules are intended to protect the gift aid small donations scheme from abuse and they work in conjunction with the community building rules to deliver fair and broadly equal outcomes for charities structured in different ways.

Without the connected charities rules, large charities would have a perverse incentive to splinter into groups of smaller charities to increase their entitlement to small donations allowances. I am sure none of us would want that to happen. However, it is important to make it clear that while connected charities are entitled only to a single shared £8,000 small donations allowance, they are still entitled to an £8,000 allowance for each of their community buildings.

The Government want the gift aid small donations scheme to be more flexible and more generous so that it can benefit a greater number of charities and donations. During the review of the scheme, we listened and HMRC became aware that the current rules did not deliver the desired outcome in certain circumstances. We received representations from local scout and cadet groups explaining that, while they welcomed the scheme and were entitled to a £8,000 small donations allowance under the community buildings rules, they were unable to take full advantage of it because most of their collections take place out in the local community—packing bags at local supermarkets, for example.

We listened and took this seriously, which is why the Bill will relax substantially the community buildings rules to allow charities to benefit from donations received outside their community building. As I said on Second Reading last week,

“among the many small, local civil society groups, the scouts and guides, the air and sea cadets and other local uniformed groups, in particular, will benefit significantly from this change and will be able to receive the support they deserve for the vital work they carry out in our communities”.—[Official Report, Small Charitable Donations and Childcare Payments Bill Committee, 11 October 2016; c. 217.]