HM Revenue & Customs wrote off almost £600,000 in unpaid taxes due from the charity Kids Company in 2003, it has emerged.
The charity, which has recently been facing questions about its management and future funding, benefited from HMRC waiving £589,587 in unpaid employment taxes in 2003.
The tax arrears were highlighted by The Mail on Sunday newspaper yesterday amid recent scrutiny of the charity’s founder and chief executive, Camila Batmanghelidjh, who the BBC and the online news provider Buzzfeed have claimed the government wanted to resign as a condition of giving the charity £3m in funding.
Kids Company’s 2003 accounts confirm that HMRC agreed in July 2003 to waive all arrears of employment taxes due to 31 March 2003, with the exception of £100,000. The £100,000 was paid by a Kids Company donor, which meant that the amount waived was £589,587.
Laurence Guinness, director of communications at Kids Company, said the charity had "experienced a delay in making national insurance payments to HMRC as resources were focused on meeting the immediate needs of a high number of vulnerable children with complex needs who were not receiving statutory support".
Guinness added: "Kids Company worked with the HMRC to agree a partial payment of NI contributions. HMRC recognised that its actions made a significant contribution towards helping support some of society's most at-risk and vulnerable children."
The Mail on Sunday’s report comes less than two weeks after Batmanghelidjh claimed on BBC Radio 4 that the government was "attempting to discredit" her.
"This is briefing to avoid the real issues, which are that we repeatedly challenged governments because they are not protecting children robustly," she said.
On the same day, Kids Company issued a statement that Batmanghelidjh was to step down from her post and "assume an advocacy and clinical role after the appointment of a new chief executive".
A spokesman for the charity said at the time that no timetable was set for this succession, but Batmanghelidjh would remain a paid employee of the charity.