The Charity Commission has opened a statutory inquiry into the Africa Relief Trust, a charity set up to work with poor people in Uganda, over its "business rates relief arrangements", the regulator announced today.
The commission said it understood the charity had rented properties and kept them on standby to be used for raising charity awareness.
"The commission’s concern and the focus of the investigation relates to the trustee decision-making process to enter into these tenancy agreements," a spokeswoman for the regulator said.
The commission previously opened a regulatory compliance case into the charity in September 2011.
A judgment in a recent court case said that a charity is entitled to 80 per cent business rates relief only if a substantial amount of the property is occupied "wholly or mainly for charitable purposes".
The Africa Relief Trust had an income of £4,232 in the year to 30 June 2012, according to its most recent annual return, up from £1,154 in the previous year and nothing in the year before that.
Two charities are already the subject of commission inquiries over business rates relief arrangements.
In both cases the charities have taken over the occupation of privately owned properties and claimed an 80 per cent discount in business rates.
One, the Public Safety Charitable Trust, was found by the courts not to have met the rules for charitable occupation and faces a multi-million-pound bill from three local authorities. It was wound up in the High Court earlier this month.
The other, the Kenya Aid Programme, has been involved in a dispute with Sheffield City Council over £1.6m of unpaid rates.
Third Sector attempted to contact the Africa Relief Trust for comment, but received no response.