Charity Commission of England and Wales statement on The Cup Trust scheme

The Charity Commission of England and Wales has put out a statement on a major scheme involving UK Gift Aid.  From a Canadian perspective it is interesting to see the Charity Commission dealing with this sort of abuse.  In Canada, we have had “abusive charity gifting tax schemes” that over the last decade have issued over $6 billion in tax receipts and according to CRA less than 1% of that amount was spent on charitable activities.  Another interesting point from a Canadian perspective is that unlike what the Charity Commission has done in releasing a statement, CRA cannot make a statement about an existing registered charity.  Under s. 241 of our Income Tax Act (Canada), the Charities Directorate of CRA is prohibited from commenting on a perceived massive abuse of the system by a registered charity until after such charity has lost its registered status (which could take 5-10 years in some cases).  So if CRA sees a major scheme, such as this and if they have concerns they are not allowed to say anything to the public (to protect the reputation of the sector or to protect individual taxpayers from involvement.)  I have made a number of presentations to the Finance Committee were I have encouraged them to change s.241 to allow for CRA to comment on serious abuses by a registered charity.