Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a655298

MPs to question charity chief over £46m tax scam

by Daniel Grote on Feb 01, 2013 at 07:24

MPs to question charity chief over £46m tax scam

Parliament's Public Accounts Committee is to question the charity regulator over a charity used as the front for £46 million of tax avoidance, according to The Times.

Charity Commission head William Shawcross will be quizzed by MPs about the Cup Trust, which carried out trades that artificially generated gift aid for donors to reduce their tax bills, according to the paper.

Investors who placed money into the scheme would receive most of their money back, but still be able to claim gift aid on top of that amount. The Cup Trust raised £173 million over two years but only gave £55,000 to good causes.

Committee chairman Margaret Hodge said Shawcross 'had questions to answer about how such flagrant abuse was allowed to occur.'

10 comments so far. Why not have your say?

WGFS

Feb 01, 2013 at 07:58

Smells a tad wrong to me .....probably get a knighthood

report this

Mitul Patel

Feb 01, 2013 at 08:33

if true, that is outrageous - 55,000/46,000,000 = that is a £1 Contribution for every £999 claimed. that is 1000 times worse than these circular tax schemes sold where at least you would make a contribution of £170 per £1000 - crazy stuff - and the charities are at it too - goodness

report this

alan from perth

Feb 01, 2013 at 09:14

why is it outrageous, if its legal the its up to tax authorities to have laws to stop it-how many of you have paid cash for jobs from tradesmen. And I will take no lessons from MPs re tax avoidance ie 2nd homes , iislands in my back garden, employing my family as my staff -need I go on.

Prepare proper laws that fancy well paid accountants cant get round and have tax laws that are simple to understand and not open to abuse

report this

John Whipple

Feb 01, 2013 at 09:14

Much smaller "family" controlled charities do much the same.

Say you "gift" your bonus to a charity or other part of potentially taxed salary......

Rumour has it that a certain new knight of the realm (that you may all be aware of) has such a scheme.

report this

Ian Jenkins

Feb 01, 2013 at 09:14

The Banks with swops. The banks with PPI. Charity Commission with Gift Aid, what next The FSCS, FOS and money Advice Service lining their pockets ?

report this

Mitul Patel

Feb 01, 2013 at 09:26

Alan - look at the numbers - £46 Million of Tax Avoidance and only £55,000 going to good causes - that is what i am miffed about -point taken , i would rather charities get the money however if i had to raise as the article suggests £173 Million over 2 years, and have the public pay taxpayers £46 Million in tax relioef, and then finally the charity only gives £55,000 of that for good causes there is something seriously wrong with that charity

report this

alan from perth

Feb 01, 2013 at 09:49

yip point taken, i just get totally hacked off with sanctimonius MP's trying to accuse anyone of "alleged fraud ",i also get hacked off by the charity bullies thrusting tins in my face on a saturday in town when less than 10p in the pound often finds its way to the recipients

sorry rant over!!!!

report this

Adam Smith

Feb 01, 2013 at 15:27

So the Charity Commission has "questions to answer about how such flagrant abuse was allowed to occur."

Let's keep this simple, Ms Hodge - the CC has been perennially underfunded and is, in fact, totally toothless as it has no real enforcement powers. The DPP has to undertake prosecutions on its behalf. And the fact that the CC is not itself a prosecuting authority seriously limits what information it can be given by other agencies such as police forces, HMRC, etc.

So I think we can see where the root cause of the problem originated, and it's not really something the CC itself can fix.

And no, I've never worked for them.

report this

Richard Hardy

Feb 01, 2013 at 16:50

I think it should be SOCA who should be investigating this and not MP's.

Just goes to show regulators in all forms are bloody useless - the FSA, the FSA (the food one) and the charity regulator.

report this

Ian Simpson via mobile

Feb 01, 2013 at 19:07

Mitul - the charities are not at it. This is a tax avoidance scheme mascharading as a charity.

Also, the CC can only regulate UK charities. Unfortunately, there's nothing to stop tax relief being claimed on donations to overseas charities which may be completely unregulated.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Long time coming: is the recovery here to stay?


Click here to watch a series of sponsored interviews with Jupiter's fund managers on the UK equity market.

Today's top headlines

More about this article:

What others are saying

Archive


Sorry, this link is not
quite ready yet