Charity Commission says there are no other Cup Trusts

Regulator disputes claim by Public Accounts Committee that there are as many as 50 similar tax-avoidance schemes in the sector

Cup Trust
Cup Trust

The Charity Commission has disputed the Public Accounts Committee’s claim that as many as 300 cases similar to the Cup Trust tax-avoidance mechanism are investigated by HM Revenue & Customs each year.

A spokeswoman told Third Sector that the regulator did not believe there were any similar schemes in the voluntary sector.

The Cup Trust raised £176m in private donations over two years, but gave only £55,000 to charitable causes and claimed £46m in Gift Aid.

In a statement published this morning alongside its report, Margaret Hodge, chair of the PAC, said: "HMRC told us that it investigates 300 similar schemes a year. This strongly suggests that the Cup Trust case is just the tip of an iceberg."

But a spokeswoman for the commission said the committee had misunderstood the evidence given by HMRC during the committee hearings. "The 300 cases investigated relate to anything to do with charity tax fraud and do not specifically relate to tax-avoidance schemes," she said. 

During the evidence stage of the hearing, Hodge said she had been told that as many as 50 similar tax-avoidance schemes existed. But the commission spokeswoman said the claim could not be substantiated. "We don’t recognise that figure of 50," she said. "We don’t believe that there are any similar schemes."

The committee also called for the commission to release all the evidence that led it to register the Cup Trust in the first place. In April, the commission refused to release its correspondence with the Cup Trust in response to a request made under the Freedom of Information Act.

The commission spokeswoman said that it was not able to release any information because it had begun a statutory inquiry into the Cup Trust. This started on 1 May. "We have already told the committee that we’re not able to release any documents at this stage," she said.

A spokesman for the committee said it did not comment further on published reports.

Andy Hillier

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