The regulator is criticised by MPs over revelations millions were allowed to be funneled through a tax haven trust.

The charity regulator in England and Wales is under pressure over its failure to prevent a trust operating as a charity for tax avoidance purposes. A report by MPs said the Charity Commission should never have granted legal charitable status to one trust which raised £176m in two years but paid out just £55,000 in donations. The Charity Commission's failure to stop UK-registered charity the Cup Trust abusing the law to avoid tax is "unacceptable" and could have been easily avoided through carrying out elementary checks, the Commons Public Accounts Committee (PAC) said. The charity, which has trustees in the British Virgin Islands (BVI) tax haven, also claimed Gift Aid of £46m, but has not been paid the money.

Committee chairwoman Margaret Hodge MP said the Trust never met the legal criteria to qualify as a registered charity. The report said that "despite its declared charitable aims, it is clear that the Trust was set up as a tax avoidance scheme by people known to be in the business of tax avoidance". The MPs warned that the trust could be "the tip of an iceberg" as HM Revenue & Customs (HMRC) told the PAC it was aware of eight other schemes relating to charities and investigates around 300 similar schemes a year. The PAC will now carry out an investigation into whether the watchdog is fit for purpose......Read more here