The Charity Commission should be scrapped and its regulatory functions handed to HM Revenue & Customs, Margaret Hodge, chair of the Public Accounts Committee, has suggested.
Speaking yesterday at an evidence session of the PAC on Gift Aid, Hodge, who is also Labour MP for Barking, said: "I’m ending up thinking, why doesn’t HMRC just regulate charities. Why do we need the Charity Commission at all? We could put a little quango on the bonfire here."
The session was held after the publication last month of a report on Gift Aid by the National Audit Office, which showed that almost 10 per cent of the tax relief paid on charity donations to both charities and donors last year could have been claimed through tax abuse or error.
Hodge said at the session that the NAO report had highlighted poor relationships between the commission and HMRC.
"It’s full of examples of failures on both sides to work together effectively," she said.
But Lin Homer, chief executive of HMRC, told the committee she did not support this view.
"I personally think the Charity Commission does a variety of things that are wider than the work we do with charities," she said. "It’s reasonable to ask whether we as a bigger organisation are doing as much as we can to make their job easier."
Homer said there was a regular flow of information between HMRC and the commission.
David Richardson, director of counter-avoidance at HMRC, also told MPs on the committee that his organisation and the Charity Commission had signed a new memorandum of understanding that allowed them to share more information. He said that legal advice received by HMRC showed it was now possible to share information about "the people running the charity and their own tax position".
A spokeswoman for the Charity Commission said the regulator did not wish to comment.