The Cup Trust has advised it did not award the £80,000 it had allocated for charities in 2012 because the Charity Commission’s investigation was taking “longer than envisaged”, and has confirmed that HMRC is withholding gift aid.

In its annual accounts for the financial year-end March 2012, seen by civilsociety.co.uk, the Cup Trust said: “Although the investigation concluded in March 2012 the trustee did not wish to make the grants in a short time period before the end of the accounting year-end.”

The accounts state that the charity intended to distribute the grants before March 2013, “when prudent to so given all factors relevant to the situation”. These grants were due to be made from its reserves, which the accounts indicate stand at £112,292, not from gift aid payments.

Civilsociety.co.uk has been unable to ascertain as yet, if these payments have been made.

Gift aid withheld ‘pending enquiries’

The Cup Trust confirmed in its accounts that the £46m it has claimed in gift aid and gift aid transitional relief in its first two years of operation was being "withheld" by the HMRC "pending enquiries". However the Cup Trust still believed at the time the accounts were published that these claims would succeed.

At the Public Accounts Committee meeting last month Lin Homer, chief executive of HMRC told MPs that no payments had been made to schemes set up in the same way as the Cup Trust.

MPs criticised the Charity Commission for allowing the Cup Trust to continue, and William Shawcross, chairman of the Commission subsequently admitted that the Commission had been too lenient on the Cup Trust.

The National Audit Office has opened an investigation into the Charity Commission in light of the revelations about the Cup Trust.  

More trustees and a new grants policy

Going forward the accounts reveal that the charity is “consulting on how the charity will change once the gift aid claims are paid by HMRC and this includes the matters of governance and in particular the number of trustees and the grant policy”.

Currently the Cup Trust has just one corporate trustee, Mountstar PTC, and its grant policy is to award grants from the income and the whole or part of the capital trust fund, to small children’s charities.

The charity’s income plummeted in 2012 from £78m to £5,000, and advised that “the trustee recognises that it will raise less funds in future years”. It received £5,000 from donations and did not buy or sell any gilts.

See here for more background on the Cup Trust case.