The Inland Revenue is being asked to investigate why British Scientologists are refusing to pay a tax on the grounds they do charitable work — even though the controversial religion has been refused charitable status.
In a 49-page landmark ruling, commissioners said the church had not demonstrated it was “established for the public benefit as to satisfy the legal test of public benefit of a charitable purpose for the advancement of religion or for the moral or spiritual welfare or improvement of the community”.
Yet church accounts filed at Companies House argue it does not have to pay corporation tax as it was established for “charitable purposes”.
Lib Dem MP Norman Baker disagrees: “In my view they should be liable to pay corporation tax,” he said. “As far as I am concerned there is no evidence to suggest they are a charity. I am not even sure they are a religion. I want a full and detailed explanation from the Inland Revenue.”
The organisation files accounts as the Church of Scientology Religious Education College Inc, which was incorporated in Australia as a religious charity in 1976. It “commenced activities” in Britain in 1977. Under “taxation”, it states: “The church is a South Australian charity and is established in England for charitable purposes only. The trustees consider that corporation tax is therefore not applicable.”
Church secretary Massimo Angius told the Sunday Express: “This does not matter because we are a non-profit organisation and we posted a loss, so we are not liable to pay corporation tax. The fact is, the Charity Commission got it wrong when they made their decision in 1999. We are a charity, there is no question about that.”
Accounts for the year ending December 2005 show an income of £10,311,696 in England and Wales. With expenditure of £10,372,066 it recorded a loss of £60,370. They also reveal it had £6,749,972 cash in the bank, net assets worth £10,371,401 and total assets (less liabilities) of £19,704,389.
Founded in 1952 by US sci-fi writer L Ron Hubbard, Scientologists believe his claim that evil solar system warrior Xenu put beings in volcanoes 75 million years ago before vapourising them with nuclear bombs and that their radioactive “souls” are responsible for many of earth’s problems today.
Celebrity Scientologists Tom Cruise and John Travolta have helped boost the church in Britain, its increased income helping establish more churches around the country including Blackfriars, London.
Mr Angius said councils give them reduced business rates as their “charitable work is good for the community”. The Sunday Express understands Westminster Council cut the business rate bill by 80 per cent for a building in Leinster Gardens, London, and the City of London Corporation did the same for the Blackfriars site.
Mr Angius produced a Westminster council document deeming the church beneficial to the community for work, including drug awareness visits to schools, concerts, volunteer ministering and donations, including to Great Ormond Street hospital for sick children. It notes the organisation is not a registered charity but says it does not have to be.
The report’s author wrote: “Having visited the property, I find it difficult to understand how the church’s ‘reverence to a Supreme Being’ is not in line with other forms of’worship’ at more mainstream religions. A key principle of Scientology is the requirement to help others in the community.”
Scientology executive director Bob Keenan said: “After the 7/7 bombings we provided 300 people to help victims with counselling and support. This is just one example of the sort of charity work we do.” About 400 staff work at the church’s Saint Hill HQ in East Grinstead, West Sussex. Several hundred live at Walsh Manor,Crowborough, East Sussex, a former institute for miscreant youths. Each morning 20 minibuses ferry them to HQ, 10 miles away.
A local said: “There seem to be more and more of them, young, old, men and women. Even at six in the morning you see them reading their books on Dianetics. They smile in the street but don’t really get involved with the community.
“Since the Panorama programme a lot of people have a different view of them and there is genuine concern about the increasing numbers.”
Church leaders are consulting libel lawyers over the BBC Panorama programme, in which journalist John Sweeney crosses swords with US-based church official Tommy Davis, son of Hollywood actress and church member Anne Archer.
International external affairs director Mike Rinder said: “Tommy felt let down by Panorama because he set up all the interviews, even one with his own mother, then Sweeney subjected them to abusive questions about brainwashing.”
Mr Sweeney stands by his exposure of Scientology methods, particularly claims that psychiatry is an “industry of death”. But when he interviewed former Cheers star Kirstie Alley she asked him: “Would you ever sit down with a Jew and tell them their religion is a cult?”