Editorial: The Charity Commision's inquiry into the Cup Trust is late, but welcome

The watchdog's difficulties over the case have brought it to a low point, writes Stephen Cook

Stephen Cook
Stephen Cook

The Charity Commission's decision last week to open a full statutory inquiry into the Cup Trust inevitably prompted much hollow laughter and a remark from Margaret Hodge MP, chair of the Public Accounts Committee, about closing the stable door after the horse had bolted. To the critics, the inquiry looks very much like a posterior-covering exercise.

But better late than never, and there is now an opportunity for a detailed and, one hopes, instructive dissection of a charity that seems to have been set up primarily as a tax-avoidance vehicle. The interim manager appointed by the commission to run it in place of the sole corporate trustee should have full access to records that could tell the whole story.

The commission says the inquiry is prompted by the receipt from HM Revenue & Customs, under a specific information-sharing power, of new details. These presumably relate to the decision by HMRC, mentioned by an official to the Charity Tax Group meeting last week, not to agree payments under a circular Gift Aid tax-avoidance scheme referred to as Project 2010 - a scheme that looks very much like the Cup Trust. The terms of the commission's inquiry are focused strongly on the charity's Gift Aid claims.

The commission has said all along that it could not find any legal holes in the structure of the Cup Trust, and there is no reason to doubt that. But there is more to life than the letter of the law, and a commission that was more pragmatic and hungry to chase down abuse would surely have seen through this charity's apparent game early on and found a way of challenging it before it became a scandal.

The commission's hesitancy over the Cup Trust, combined - paradoxically - with its relatively tough stance on charitable status for the Plymouth Brethren and the parliamentary brouhaha that has caused, has brought it to a low point. It now has a good chance, under a new chair with new board members, to regroup and rebuild for the future; but some habits will no doubt prove hard to change.

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