| Synopsis: |
This report examines the Cup Trust and the Charity Commission's procedures for regulating charities. The Charity Commission (the Commission) registered the Cup Trust (the Trust) as a charity in April 2009, with a company called Mountstar - based in the British Virgin Islands - as its only trustee. Although the Trust generated 'income' of GBP176 million, only GBP55,000 has been given to charitable causes, and the Cup Trust claimed Gift Aid of GBP46 million. 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 Trust does not meet the public expectations of a charity and it is unacceptable that the Commission has not been able to put a stop to this abuse of charitable status. The Commission began to investigate the Trust in March 2010 following concerns raised about its governance and fundraising. This investigation closed in March 2012. The Commission eventually 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 Commission has not yet brought forward proposals to change the law to exclude organisations like the Cup Trust from the register. In the last 25 years, the Committee and the NAO have repeatedly found severe shortcomings in the Commission's performance, particularly in relation to investigation and enforcement. The Commission hardly makes use of its statutory powers, nor is it targeting its available resources to best effect. |