If HMRC pays out the £46m in gift aid claimed by the Cup Trust, the Trust will apply all the monies to charitable grants and voluntarily provide details to the Charity Commission of all grants made, the Trust has promised in its latest trustee’s annual report.
The report, for the year to 31 March 2013, also states that the corporate trustee, Mountstar (PTC) Ltd, is confident that HMRC will pay out the £46.4m in gift aid that the Trust has claimed for 2010 and 2011.
It said that after receiving legal advice, the trustee is “still of the opinion that these claims are more than likely to succeed” despite HMRC’s statement to the contrary – though it acknowledges it will have to contest the case in the Tribunal and courts.
It admits it is unlikely to receive any of the money for at least three years, and possibly longer, but once it is received, “all monies can only be applied for charitable purposes”.
“The trustee will publish details of all recipients of grants made from those monies to the Charity Commission on a voluntary basis and such information will be provided at the time of payment,” the report states.
Made grants of £97k in 2012/13
The Cup Trust gave out just under £100,000 in grants during the year to 31 March 2013, though it blamed media coverage of its activities for causing delays in its grants distribution.
The Trust said it decided to spend most of its remaining assets - £80,000 - on grants, along with an additional £17,292. The recipients were all small charities that benefit children and young adults, who had requested funds from the organisation.
The latest grants allocation takes the total funding distributed to charities since the Cup Trust’s inception, to £152,292. The Trust is currently under investigation by the Charity Commission following allegations that it is primarily set up as a gift aid scam. It gave just £55,000 in charitable grants in its first two years despite having an income of £176m. Its operating structure meant that both the charity and its donors could claim gift aid, though HMRC has declared that nobody has benefited from schemes of this nature.
The Commission has opened a statutory inquiry and appointed an interim manager, though the Trust is preparing to challenge this in the Charity Tribunal.
Trust 'will raise less in future’
The report says that the trustee will continue to seek income for the charity from various sources, although it “recognises it will raise less funds in future years than it did in 2010 and 2011”.
“However, the trustee shall also ensure that it is in a position to handle the distribution of grants, pursuant to a revised grants policy, once the gift aid claims are paid by HM Revenue & Customs.”
Media interest curbed activities
It states that during the year to 31 March, the charity did not undertake significant activities and one reason was the “ongoing media interest”.
“The potential media articles caused the delay of grants to other charities as the trustee did not wish to place potential recipients in an uncertain position until it was clear what the media articles would contain.”
The organisation recorded income during the year of £5,000 and finished the financial year with just over £20,000 in reserves.
It added that in terms of long-term objectives, the trustee “continues to consider how the charity will change once the gift aid claims are paid by HMRC and this includes matters of governance and in particular the number of trustees and the grant policy”.
Interim manager: accounts unverified
Stone King, the law firm whose partner Jonathan Burchfield has been appointed interim manager of the Cup Trust by the Charity Commission, said the accounts were yet to be verified.
A spokeswoman said: “Please note these were prepared and signed off by the trustee, and the interim manager has yet to verify the whole accounting position. We are not able to comment further on the contents of these accounts.”
