The Commission has used its new powers conferred under the Charities (Protection and Social Investment) Act 2016 to disqualify the company, Mountstar (PTC) Ltd from being a charity trustee for a period of 15 years.

Mountstar acted as sole and corporate trustee of the Cup Trust, which has been wound up by the interim managers appointed by the regulator and removed from the charity register.

The latest order was made on the grounds that Mountstar, as trustee, was responsible for misconduct and/or mismanagement in the administration of the charity; was unfit to be a charity trustee; and that it was desirable to make the disqualification order in the public interest so as to protect public trust and confidence in charities.

The Commission said it is also considering regulatory action against the individuals who were directors of Mountstar.

It is continuing with its formal investigation of the charity and said it will report its findings once this is concluded.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: ‘In using this new power to make an order to disqualify this company that we have found is responsible for misconduct and/or mismanagement in administering The Cup Trust, we are sending a strong message to all those whose actions harm charities: that they will be held accountable and that we will protect other charities from those who pose a risk to them.

‘The Commission was concerned in this case that public trust in charities would be undermined if this charity continued to be involved with a tax avoidance scheme through facilitating a gift aid claim. Arrangements which principally aim to confer advantages to private businesses or individuals with any benefit to the charity being a by-product of the scheme are not consistent with trustees’ duties.’

In 2013 the Cup Trust was denounced as a ‘sham charity’ in highly critical reports from the public accounts committee and National Audit Office, amid claims it was seeking to abuse gift aid rules.

Earlier this month the Financial Reporting Council (FRC), which had also been investigating the Cup Trust issued substantial fines and bans, the first imposed over an abusive tax avoidance scheme, rather than for audit and accounting failures and abuse.

ICAEW member John Mehigan, a director of Mountstar, was banned for 10 years and fined £70,000, while the charity’s auditor, Hillier Hopkins, was fined £100,000 and told to pay £100,000 towards costs. The firm has also been given a reprimand. The audit partner, Philip Collins, received an FRC reprimand, £20,000 fine and must pay £20,000 in costs.