The Charity Commission has cleared the Politics and Economic Research Trust (Pert) following allegations published in the Guardian that it was used as a vehicle to channel funds enhanced with gift aid to the Taxpayers Alliance.

Publishing its regulatory case report yesterday the Commission advised that there was "no evidence" to support the claim but warned of the "reputational risks to the charity if its relationship with the Alliance was not properly managed".

Pert, formerly called the Taxpayers Alliance Research Trust, is the charitable arm of the Taxpayers Alliance, having registered with the Commission following its name change in late 2007. Its objects are "to advance the education of the public on matters of public taxation, public policy, applied economics and political science". The Taxpayers Alliance is not a charity and was set up in 2004 to represent taxpayers and fight for lower taxes.

But in October 2009 the Commission was forced to open an investigation into the charity after the Guardian published an article accusing the Taxpayers Alliance of channelling money through the charity to gain tax relief. The article was then followed by an official complaint by an MP alleging inappropriate links between the charity and the Conservative Party, due to its relationship with the Alliance.

Some £505,000 had been awarded in research grants by Pert to the Alliance by 1 December 2009, the investigation found, during which time the Taxpayers Alliance chief executive, Matthew Elliot, was also the charity's company secretary. The charity confirmed that for a time the Taxpayers Alliance was the sole recipient of funding from the charity, although this is no longer the case.

The Guardian article quoted David Wall, secretary of the Conservative-friendly Midlands Industrial Council, which advised it had provided donations both to the Alliance and to Pert, as saying he had been asked to donate for research conducted on the congestion charge through the charity so that it could "benefit from gift aid".

But the Commission was advised by Wall that the comments in the article were "misleading" and journalist Robert Booth, who wrote the article, was unable to provide further information to substantiate the claims. 

Elliot stepped down as company secretary of the charity on 26 February 2010, succeeded by trustee Patrick Barbour. The charity is now undergoing a full governance review which it will submitted to the Commission. 

The case highlighted the issue of collaboration with non-charity organisations, said the Commission, advising that charities may only do so "if it is in furtherance of their charitable objects".