Fears grow over 'missing' charity money

The Inland Revenue, which records charities for tax purposes, launched a 'cleansing process' to tidy up its register last March.

Of 31,000 letters sent out, tax officials received only 19,900 replies.

More than 4,000 letters were returned undeliverable, while in excess of 6,000 were delivered but did not reply.

Officials are concerned that these 'missing' charities could be a front for tax evaders, with each charity 'misappropriating' assets worth £10,000 on average.

A Revenue spokesman said: 'We would like to appeal to these 11,100 to contact us if they don't recall receiving the original letter. If they haven't replied, they will not appear on the new register.'

But a spokesman for the Office of the Scottish Charity Regulator dismissed speculation that £100m is missing in tax, as 'spurious and unrealistic due to the nature of the sector'.

He added that the 'missing' charities 'could be dormant, have no assets or simply have changed address'.

The problem partly stems from the lack of control over the sector, and unclear responsibility for updating the Scottish charities' register.

Tax authorities have traditionally depended on charities keeping them notified of any changes to their status or contact details.

But all that is set to change when the OSCR takes on new powers under the Scottish charities bill.

Once enacted, responsibility for maintaining the register will fall to the OSCR.

But until then the duty remains with the Revenue authorities.