A charity has been placed into liquidation after a court ruled that it owed more than £17 million in business rates.
The report, published by the Charity Commission, follows the case of Public Safety Charitable Trust (PSCT), an organisation set up to “broadcast public service messages to communities via Bluetooth equipment”.
According to the investigation, the charity took out leases on empty properties and placed equipment in them to broadcast information about crime in the area.
The landlords would receive a reduction in their business rates for leasing properties to a charity, and in return pay a donation to PSCT.
The Charity Commission was first notified to the operation in October 2011 after local authorities raised concerns over the legality of the scheme. At the time of the investigation, the charity reportedly held 2,000 leases for properties in 240 local authorities.
Court proceedings were launched shortly after, but it was not until May 2013 that the Court of Appeal eventually ruled that “solely operating Bluetooth transmitters in premises was not sufficient for charitable purposes”.
It meant that the charity became liable for “approximately £17 million” in business rates on the premises it leased.
The trustees were also criticised for not acting in the charity’s interests and subjecting the organisation to the risk of financial loss for business rates, despite having taken “adequate legal advice”.
The charity was wound up and removed from the register and the trustees were disqualified for a combined 14 years.
Commenting on the inquiry, Amy Spiller, head of the investigations team at the Charity Commission, said: “Being a charity is meaningful – we expect trustees to be accountable and demonstrate their worth to the public and donors.
“The trustees of PSCT could not show this, instead they undermined the meaning of charity by enabling businesses to avoid paying business rates, resulting in the charity taking on huge liabilities they could not afford and consequently costing the charity’s future.”
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