Charity gave more than 90 per cent of its funding to the Taxpayers' Alliance, Charity Commission investigation finds

Regulator has given "regulatory advice and guidance" but says there was no evidence that the Politics and Economics Research Trust was a vehicle for funding the alliance

Charity Commission
Charity Commission

The charity the Politics and Economics Research Trust gave more than 90 per cent of its funding to the Taxpayers’ Alliance in its first two years, according to a report from the Charity Commission.

The report, published yesterday, shows that between December 2007 and December 2009 the charity gave £505,000 to the Taxpayers’ Alliance, a pressure group that campaigns for lower taxes. During that period the charity made grants worth £544,000, including the money paid to the Taxpayers’ Alliance. 

The report, which summarises an investigation conducted in response to a complaint from an MP and a report in The Guardian newspaper, says there was no evidence to support the allegation that the Taxpayers’ Alliance used the charity as a vehicle to channel funds, enhanced with Gift Aid, to its own account.

The commission has issued regulatory advice and guidance to the charity, which it says covers "the reputational risks to the charity if its relationship with the Alliance is not properly managed." A statement from the commission said trustees had explained that they were already aware of this.

The report says the Taxpayers’ Alliance was the only recipient of funding from the charity for a period of time, but it now allocates funding to other organisations as well. It also says the pressure group’s founder, Matthew Elliott, was the company secretary of the charity until February 2010.

The report says: "The commission had not seen any evidence to support the allegation made that the charity had been used as a vehicle to channel funds enhanced with Gift Aid to the Alliance.

"It is possible for trustees of a grant-making research charity to decide to award all or a majority of its funding to one organisation and for this to be a reasonable decision in the best interests of the charity in the particular circumstances.

"However, in doing so the trustees need to carefully consider the range of individuals and/or organisations that are both eligible to apply and capable of complying with the terms of the grant in order to satisfy themselves that the educational purposes are furthered optimally in their view."

The charity was originally called the Taxpayers’ Alliance Research Trust, but it changed its name on 23 November 2007 and was added to the commission’s register of charities on 6 December 2007.

Third Sector asked the Politics and Economics Reseach Trust who founded the charity; how it decided which organisations to fund; whether it  advertised the fact that it had money available in the form of grants; whether it claimed Gift Aid on the donations it received; and if so, what happened to this money.

Patrick Barbour, company secretary of PERT, replied that the commission had found no evidence to support the allegations in the Guardian: "We are therefore very pleased to have been given a clean bill of health by the Charity Commission. The Politics and Economic Research Trust did not act improperly, the Guardian did not have any evidence to support its claims and we welcome the fact that we can put these unfounded allegations behind us."

Matthew Sinclair, a director of the Taxpayers’ Alliance, told Third Sector: "The charity was set up with the objectives of funding and disseminating research into public taxation, public policy, applied economics and political science.

"It chose to achieve these objects by funding the Taxpayers’ Alliance because it received applications from it and was impressed with its work. Many grant-makers work in this way and the Charity Commission has confirmed that this is appropriate." 

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