Tax scandal threatens charity donations
Regulator stands accused of cowardice and bringing the whole sector into disrepute
Wednesday 08 May 2013
The Charity Commission’s handling of a high-profile tax-avoidance scandal that saw shockingly little donated money reach good causes has put charities at risk of losing the public’s confidence – and consequently their money, one of the leading figures in the sector has warned.
Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations (NCVO), the UK’s largest charity association, said the regulator had brought charities into “disrepute” by failing to act over the controversy.
The Cup Trust was exposed in January as giving only £55,000 to good causes despite raising £176m over two years as part of a scheme in which donors were suspected of claiming millions in tax relief through an abuse of the Gift Aid scheme. But after a 24-month investigation, the Charity Commission, chaired by William Shawcross, allowed the Cup Trust to remain on the charity register.
Sir Stuart condemned the decision in a speech he gave at a conference in London. He said that “the complete lack of intervention by the commission in this whole affair has brought damage and disrepute to the sector as a whole, putting us at serious risk of losing the trust and confidence of the public”.
He continued: “What was so obvious in the Cup Trust case is how a legalistic approach dominated common sense, meaning that decisions were made following the letter of the law rather than the spirit, no matter what disastrous consequences this caused.
“It seems that, in the case of the Cup Trust, the commission was so concerned about what it couldn’t do that it didn’t do what it could do.”
In a sustained attack at the conference organised by the Association of Charitable Organisations, Sir Stuart further criticised the performance of senior Charity Commission representatives in front of the Public Accounts Committee in March.
He argued it had “raised serious concerns about the regulator’s handling of the case, and more generally about its operation”.
The NCVO head said that, as a result, the commission’s credibility as an effective regulator had been seriously undermined – speaking of “accusations that it is a paper tiger – not so much a light-touch regulator as a no-touch regulator”.
He added that the commission had some fundamental questions to answer over its leadership and “lack of direction” and “disappointing lack of bravery”.
The regulator last night denied claims it had failed to act, saying that it had launched a formal inquiry into the Cup Trust in April after receiving new information from HM Revenue & Customs (HMRC).
An interim manager was also appointed by the commission to take control of the charity.
Michelle Russell, head of investigations and enforcement at the Charity Commission, said: “We have had ongoing concerns about the charity’s involvement in the Gift Aid scheme and the potential for damage to public trust and confidence.
“While we took no regulatory action pending HMRC’s determination of the charity’s Gift Aid claims, we have continued to look at the trustee’s handling of its responsibilities and duties.
“We always made it clear that if new information came to light, we might open a further investigation. In the light of our ongoing concerns, when we received new information from HMRC, we took immediate steps to open a statutory inquiry.”
In response, the Cup Trust has made a formal appeal to the Charity Tribunal against the commission’s inquiry.
The buck stops here: William Shawcross
William Shawcross, who took over as Charity Commission chairman in October, has a background in aid work and human rights. From 1997 to 2002, he was on the council of the Disasters Emergency Committee. Educated at Eton and Oxford, he studied sculpture at St Martin’s College of Art. After university in 1968, he went to Czechoslovakia and saw the country’s uprising against Soviet rule. He reported on the Vietnam War and has written 12 books on international conflicts.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Strictly Come Dancing 2014: Gregg Wallace joins line-up as final celebrities revealed
- 2 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 3 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 4 Oil tanker with $100 million cargo goes missing off Texas coast
- 5 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony