The Charity Commission has opened a statutory inquiry into a Christian charity, having been alerted to concerns that include non-primary-purpose trading and potential conflicts of interest.

The regulator said in a statement today that it had begun investigating Into the Light Ministries, which is based in Leighton Buzzard, Bedfordshire, and has objects including the relief of financial hardship through providing funds, clothing or other basic essentials.

The commission said it had started looking into the charity, which was registered with the commission in 2011, after a third party questioned the charity’s financial controls.

This led to the regulator obtaining bank records and reviewing previously filed accounts, which the commission said revealed significant concerns about its accounts, potential conflicts of interest and non-primary-purpose trading, which indicated a possible risk to charitable property.

The charity’s income has grown rapidly, from £173,986 in 2011/12 to £842,578 four years later, commission records show.

The charity’s latest accounts list trading income of £820,719, but it is not clear from the accounts, which the regulator said were not compliant with reporting standards, how this income has been raised.

The link to the charity’s website on its entry in the regulator’s online register redirects visitors to what appears to be a shoe retailing business called Into the Light Leighton.

The commission said its inquiry would focus on issues including whether any trading carried out by the charity was compliant with legislation, if the trustees were properly managing the charity’s resources and financial affairs, and if any conflicts of interest with connected parties had been adequately managed.

The regulator said it would also consider to what extent the charity operated for the public benefit.

David Cameron, the former Prime Minister, has admitted that some legitimate criticisms could be made of his big society agenda, which was one of the hallmarks of his first year as Prime Minister.

Speaking at the launch of the Fore Trust, a new grant-making organisation for small charities, in central London last night, Cameron acknowledged that voluntary organisations and social enterprises needed more financial and technical support than had been envisioned under the big society agenda, which was launched after he became Prime Minister in 2010.

But Cameron also defended the idea, saying that rather than there being a binary view of the public sector versus the private sector, more focus was needed on a society that was “vibrant and caring and compassionate – and big, dare I say it, big”.

He jokingly described it as “BS”, but hastily said it was “not BS” and he did not accept the criticism that the agenda, which encouraged more voluntary participation in public and community life and services, was simply a cover to disguise public sector funding cuts.

He said he believed “the fair criticism that was made kind of came in two parts”. The first was that “you can’t expect all of these big society organisations, all of these social entrepreneurs, all of these charities and voluntary bodies to spring into life”.

The second fair part of the criticism, he said, was that “you can’t expect them to be able to cover all of the country, every region of the country, all in one go”.

These organisations were “very often under-capitalised, have problems in replicating their service” and had “difficulties expanding and getting the access to great technology or brilliant management or great systems”, said Cameron.

But he said this was where he believed organisations such as the Fore Trust could come in.

The trust’s official launch came after a four-year pilot project under the umbrella of its parent charity the Bulldog Trust, during which the organisation gave away almost £1m in 51 separate grants.

Speaking at the same event, Mary Rose Gunn, chief executive of the Fore Trust, said the organisation was designed to support smaller charities that might otherwise struggle to secure the necessary funding to get off the ground.

“For small charities there is no one who provides what in the business world you’d call seed funding,” she said.

“It is almost impossible to get the sort of support you need as a small organisation to get you from the kitchen table to the first stages of professionalism. It doesn’t matter how good the operations are or what an amazing impact you’re having, funders generally like things with long track records, otherwise they’re not able to help.”

The trust would offer an open application process that would allow small organisations to identify their own needs and allow those who did not have grant application expertise to have a chance of securing funding, she said.

It will also offer ongoing business support and advice, as well as feedback on unsuccessful applications, Gunn said.

The organisation was now looking to raise and give away £9m over the next three years, and was on course to hit its target of giving away £1.3m in the first year, according to Gunn.

The money would come from corporate investors and supporters, she said, and would also give businesses the chance to invest in small, innovative and unusual charities they would otherwise struggle to find and engage with, she said.

“We going to try and create a better, more effective and fairer funding system that will, we hope, have the knock-on effect of allowing us to make creative change,” she said.

Charities that provide on-the-scene care after serious accidents will be able to recover VAT through a grant announced in yesterday’s Budget.

The move, announced by the Chancellor of the Exchequer yesterday afternoon, is expected to bring the situation for accident rescue charities into line with similar charities, such as air ambulances and search-and-rescue charities, which already get VAT refunds on goods and services.

Budget documents released yesterday said the Accident Rescue Charities Grant Scheme would “be provided to help accident rescue charities meet the cost of normally irrecoverable VAT”.

The Treasury was unable to provide any further details of the plan, such as how much money would be available or which items would be eligible for the refund, in time for Third Sector’s deadline on Thursday morning.

The new scheme has been welcomed by the Suffolk Accident Rescue Service, one of the charities likely to be able to claim from the fund.

The charity had an income of £103,100 in the year to 31 March 2016 and spent £98,800, and one of the charity’s trustees and former patients, Harry Richardson, said the refund had the potential to have a large impact on the charity.

“It’s a big issue for us because we’re quite a small organisation, but because of the work we do we have to make quite big, expensive purchases,” he said. “A new emergency vehicle can cost upwards of £30,000, for example.

“The VAT on those can be the difference between whether or not we hire a new member of staff. We have one full-time and two part-time, so that would be expanding our workforce by a third.

“We’re still trying to work out the detail of this but it’s very positive.”

Richardson said the organisation had been campaigning alongside Jo Churchill, the Conservative MP for Bury St Edmunds, to try to achieve equity with similar charities.

Churchilll said she “wholeheartedly” welcomed the announcement of the scheme.

“I have campaigned on this issue with Harry Richardson for over a year and I am delighted that the Chancellor has taken this important step,” she said.

“I look forward to seeing the finer details of this scheme in the coming days and weeks, and I will continue to press the government to do all they can to provide assistance to these crucial organisations.”

John Hemming, chair of the Charity Tax Group, said the fact that VAT refunds had also been extended to Police Scotland in the Budget showed there was no technical obstacle to VAT refunds – the only issues were political will and cost.

He said: “It is encouraging that the government is extending reliefs for front-line activities of accident rescue charities (such as those that provide emergency paramedics and doctors), and this again highlights the importance of creating a level VAT playing field for charities.”

Charities will be able to give donors a higher level of benefit and still claim Gift Aid on certain donations, the government announced in today’s Budget.

Charities cannot claim Gift Aid on a donation that the donor receives any sort of benefit from, such as a thank-you gift, unless the donation is worth significantly more than the value of the benefit.

Under current rules, for donations of up to £100, the benefit can be worth up to 25 per cent of the donation, for donations of between £100 and £1,000, the benefit value is capped at £25 and for donations of more than £1,000, the benefit can up to 5 per cent of the donation, with a maximum benefit of £2,500.

The government announced today that the different categories of donations would be reduced to two – for donations of up to £100, the 25 per cent value limit would stay in place, but for bigger donations, the benefit could now be worth a total of 5 per cent of the amount of the donation over £100 and 25 per cent of the first £100. 

This means that for a donation of £1,000, where previously the benefit limit would have been £25, the donor would not be able to received a benefit of £70 – 25 per cent of the first £100 added to 5 per cent of the remaining £900. The £2,500 maximum benefit remains in place.

According to the Budget documents, the change will come into force from April 2019.

In a statement, HM Revenue and Customs said: “Under this reform donors will be no worse off in terms of the value of benefits that charities can offer them as the new limits will be, for every eligible donation, at least as generous as the current limit.”

The move follows a review of the donor benefit rules in which voluntary sector organisations called for the rules to be simplified. 

Peter Lewis, chief executive of the Institute of Fundraising, said the change was a “positive step”.

“We welcome today’s simplification of the Gift Aid donor benefits rules, which we and others called for,” he said.

The Charity Tax Group had told the review of donor benefit rules that that current rules’ mixture of numbers and percentages was confusing.

John Hemming, chair of CTG, said he was pleased HMRC had taken up the recommendation.

“This will help to avoid the problems of the cliff-edge effect that many charities currently face,and which can lead them to not claim Gift Aid at all,” he said.

“We now look forward to co-ordinating the sector’s efforts to revise the guidance on the donor benefit rules.” 

Charities face losing at least £250m a year after Brexit, according to new research from the training and publishing charity, Directory of Social Change. 

The research paper, which is called What does Brexit mean for UK charities’ European Union funding?, says that charities benefited from £258.4m in EU funding in 2015, with £210.9m of that figure awarded to 295 charities in funds administered directly by the European Commission.

The paper, which is based on data published through the European Commission’s financial transparency system and by the UK government in 2015, found another £47.5m was awarded to 113 UK charities from European structural and investment funds which were from the EU but allocated by the UK government.

But the report says that the figures are minimum levels of funding because only one year’s worth of funding was analysed and because charities often benefit indirectly from other forms of EU investment.

The Britain Stronger in Europe campaign estimated before the referendum vote last year that British charities would lose more than £200m in funding a year if the UK voted to leave the EU.

The DSC’s report today calls on the government to clarify the level of funding available to charities through the Brexit process, to consult with the charity and wider social sector about how UK funding is awarded and to commit to replacing EU funding in full after the UK’s departure from the EU.

The Chancellor has guaranteed EU funding for organisations until 2020, but has so far not committed to funding programmes after that date.

Charity sector bodies, such as the National Council for Voluntary Organisations and the Charity Finance Group, have repeatedly called for EU funding for charities to be replaced once the UK leaves the trade bloc.

Daniel Ferrell-Schweppenstedde, co-author of the report, said: “It’s nearly 2018 – but the future of EU funding after Brexit remains extremely murky. Government needs to clarify the situation urgently, because uncertainty is already affecting budgetary outlooks for many charities across the sector.

“Trustees and executives are being left in limbo, not knowing the future of current funding and needing to find alternatives which are thin on the ground. As funding plans which looked secure for years threaten to dissolve almost overnight, the threat of disruption to vital services grows day by day.”