Another toothless watchdog

[Guest pelmetman]

The charity watchdog should never have granted legal charitable status to a trust which raised £176 million in two years but paid out just £55,000 in charitable donations, according to a report from a powerful committee of MPs.

 

The Charity Commission's failure to stop UK-registered charity the Cup Trust abusing the law to avoid tax is "unacceptable" and could have been easily avoided through carrying out elementary checks, the Commons Public Accounts Committee said.

 

The charity, which has trustees in the British Virgin Islands (BVI) tax haven, also claimed Gift Aid of £46 million, but has not been paid the money. Committee chairwoman Margaret Hodge MP said the trust never met the legal criteria to qualify as a registered charity. The report said that "despite its declared charitable aims, it is clear that the trust was set up as a tax avoidance scheme by people known to be in the business of tax avoidance.

 

The MPs warned that the trust could be "the tip of an iceberg" as HM Revenue & Customs (HMRC) told the committee it was aware of eight other schemes relating to charities and investigates around 300 similar schemes a year. The committee will now carry out an investigation into whether the watchdog is fit for purpose.

 

The MPs said it was "unacceptable" that the trust was registered as a charity in April 2009 with a BVI-based company called Mountstar as its only trustee. The company's directors were well-known to HMRC for being involved in tax avoidance, the MPs said.

 

Since then the watchdog's failure to put a stop to the trust's abuse of its charitable status was also described by the committee as unacceptable. "From the time when the trust was first registered as a charity, there were clear signals that should have prompted an investigation by the commission," the report said.

 

"Elementary checks with HMRC could have alerted the commission to the true purpose of the trust and its trustee. By the commission's own admission, the continued registration of the trust has been 'disastrous' for the reputation of the commission and the charity sector."

 

 

Despite a two-year investigation, which started in March 2010, the Commission concluded that it could not de-register the trust as it was "legally structured as a charity", despite not being for exclusively charitable purposes. The report noted that the watchdog has still not published the results of the investigation and has not put forward proposals to change the law to stop such abuse.

 

The committee and National Audit Office (NAO) have repeatedly found "severe shortcomings" in the watchdog's performance over the last 25 years, the MPs said. In 2001 the committee called on it to make more use of its powers but in the last four years it has only removed one trustee, suspended four trustees or officers of charities, and only appointed interim managers of charities on five occasions, the report said.

 

The MPs said they were "shocked to hear" that the chairman and chief executive of the commission had not read the NAO reports and were not aware of the committee's findings.

 

*-)......................Time to scrap it?.............it would save us 20+ million a year >:-)

[nowtelse2do]

Trouble is that when we hear about these things, it's the charities that get the blame and then loose revenue.

 

Set up by one of your leagal mates I bet Dave. :-(

 

Dave

[Guest Peter James]

On a similar theme its very telling that bent MP Patrick Mercer wasn't concerned about the Parliamentary Standards Commissioner, or the Police, but a bloggers website. Maybe explains why their answer to everything is more censorship.

 

QUOTE; http://order-order.com/

 

As disgraced cash-for-questions Tory Patrick Mercer plotted his dodgy Fiji deal, there was one thing concerning him above all else:

 

“Do you know the website Guido Fawkes? Guido Fawkes will be all over this. Like a dose of clap. He really will. Trying to find out where the corruption is in it.”

 

He wasn’t worried about being caught by the Parliamentary Standards Commissioner, he was worried about Guido. This blog uncovered Mercer at it with lobbyists in 2011, when he took £10,000 from a security company and sponsored a pass for its MD. The authorities did nothing. The warning signs were there, the complaint went in, but the corruption continued…