A charity that claimed Gift Aid on donations made to provide financial support for aspiring skiers and snowboarders has been forced to reform its funding system following an investigation by HM Revenue & Customs.
The Skiers Trust of Great Britain used so-called ‘bespoke funds’ to support individual skiers and snowboarders, but concerns were raised that Gift Aid was being claimed on donations that were designated for specific individuals, rather than for public benefit, according to a statement from the Charity Commission.
According to a statement posted on the charity’s website, it undertook a review of its activities in late 2014 and identified a number of areas where "there were questions about the compliance of the trust with both the Charity Commission and HMRC’s requirements".
In the charity’s most recent accounts, which cover the year to 30 June 2015, Richard Berry, the charity’s chair, said legal opinion was sought and concluded that the organisation "was acting as a trust and not as a charity".
Berry said further legal advice recommended the charity altered its operations in line with the Charities Act 2011 and accountants were brought in to make a Gift Aid audit of the previous three years.
HMRC was then informed and the charity put its charitable activities on hold while an investigation took place.
Following the investigation, the charity closed its bespoke funds with immediate effect.
The charity’s latest accounts show there were 296 designated bespoke funds at the charity which paid out £597,969 to 78 individual beneficiaries. The accounts show this was a substantial decrease on the previous year, when 146 individual beneficiaries received almost £1.6m.
A new system had been introduced to replace the bespoke funds and will require all donors and sponsors, past and present, to sign a new Gift Aid form and meet new regulations, the charity said.
According to the charity’s statement, matching donations to members of the pool of skiers and snowboarders supported by the charity "will be solely at the discretion of the trust and has to conform to the criteria set down in the Grant Award Scheme".
It advised donors: "On the matter of recovery of funds held in bespoke accounts, it has been made very clear to the trustees by the legal advisers that donations made to the Skiers Trust have to be given free of conditions and importantly are not recoverable by the donor under any circumstances.
"I must therefore ask that your next action is not to seek to recover those funds previously held in a bespoke fund, for as a charity all donations become the property of the trust once received. The positive side is every effort will be made to match your existing donation with a grant applicant – once of course he/she is nominated and then accepted into the ‘pool’."
A statement from the Charity Commission: "The commission engaged with the Skiers Trust of Great Britain regarding concerns that the charity was breaching Gift Aid rules by claiming Gift Aid on donations that were designated for specific individuals and that therefore did not meet the criteria for public benefit.
"Based on the information provided to us, we are satisfied that the charity has conducted a review of its activities and discontinued the practice of bespoke funds. We are currently evaluating whether there is a further regulatory role for the commission in this matter."
A spokesman for HMRC said the organisation did not comment on individual cases, but emphasised that "where there is evidence that the rules are being abused, we refuse Gift Aid claims to maintain the integrity of the system".