The Cup Trust’s income has dropped to £5,147 and its expenditure to nothing, according to its annual return, filed last week.
The charity, which has been labelled a tax-avoidance scheme by sector bodies, had an income of £176.5m over the previous two years, but charitable expenditure of just £55,000.
The Cup Trust makes grants to smaller charities that help children and young adults and received £97.58m in 2009/10 and £78.93m in 2010/11, all in private donations, making it the sector’s 77th richest charity by income.
Yet it declared no money spent on charitable causes in 2009/10, and only £55,000 the year after.
Accounts for the two years to March 2011 show that it spent £176.37m on buying government bonds – more than 99 per cent of its total income – but later sold most or all of these bonds for just £17,000.
Its accounts for 2010/11 say that it has claims pending for £46m of Gift Aid. If donors were paying the highest rate of income tax, this could have allowed them to claim up to £66m in personal tax relief.
The Charity Commission has been criticised by sector bodies for allowing the charity to continue operating.
Sir Stephen Bubb, head of the chief executives body Acevo, last week called on William Shawcross, chair of the Charity Commission, to conduct an inquiry into why stronger action was not taken.
The regulator said in response to the criticism that it "was not comfortable with the charity’s set-up" but concluded after an investigation that it could not be struck off the register of charities because it was "legally structured as a charity".