Axed: Children’s ski charity fund used by rich parents to slalom round the tax laws
WELL-OFF parents have been given up to £1million of taxpayers’ money to help fund skiing trips for their children, a Mail on Sunday investigation has found.
They exploited the Government’s Gift Aid scheme, designed to top up charitable donations, by setting up ‘bespoke funds’ to finance trips to luxury Alpine resorts and the purchase of expensive equipment.
Funds were then topped up by 25 per cent via Gift Aid.
The charity which administered the funds, the Skiers Trust of Great Britain, has now halted the programme following a probe by the taxman.
Rules say Gift Aid top-ups cannot go to recipients when the money is donated by a relative. But to sidestep these rules, the MoS understands that some parents made arrangements to donate into each other’s funds.
Trustees admit they became suspicious parents might be using the ruse.
HM Revenue & Customs subsequently looked into the charity and rejected the Trust’s latest claim for Gift Aid. Over the past five years, the charity has received more than £1million of taxpayers’ money via Gift Aid, although it is not known how much of that came through bespoke funds.
But the funds represent 89 per cent of all the grants the charity handed out, totalling £5.7million over 781 cases in five years.
That means each fund could have been topped up by more than £1,000 in Gift Aid.
Margaret Thatcher’s former Sports Minister Lord Moynihan and property developer and Tory donor Sir John Ritblat are both patrons of the charity while Tory peer Lord Lyell is president. They are not involved in the day-today running of the charity.
A source said: ‘This has been an open secret in the skiing community for years. A lot of these are privately educated children from wealthy parents who have been exploiting the system for financial gain.’
Labour MP Margaret Hodge said: ‘It’s shocking that a wellintentioned tax relief has been used in this way.’
The charity, which took a seven per cent administration fee from each fund, failed to respond when asked if any beneficiary has gone on to compete at the Winter Olympics.
It had advertised the bespoke funds on its website as a way of funding training, suggesting parents ‘take advantage of the trust’s charitable status’. It pointed out that HMRC banned relatives from donating and separately said it ‘discouraged’ the swapping of donations. The Trust admitted last year that it was concerned that ‘two families might make reciprocal arrangements’ but added that it had ‘no clear evidence’ that this was taking place
The charity’s chairman, Richard Berry, said: ‘The operation of the bespoke funds was referred to HMRC, who rejected the Trust’s claim for Gift Aid for the year 2014/15 because they considered that… donations into them did not qualify for relief. However, HMRC have stated that they do not intend to investigate Gift Aid claims for earlier years.’
The charity is planning to replace the bespoke funds with new system pooling all donations. It also supports other initiatives including a Snow Camp for inner-city youngsters.
The Charity Commission said it was considering its own probe, but was ‘satisfied the charity has discontinued bespoke funds’.
And HMRC said: ‘We don’t comment on individual cases but where there is evidence that rules are being abused, we refuse Gift Aid claims.’