The Charity Commission has removed a housing body from the register, after it was accused of channelling £5.5m in housing benefit to its founder’s company.

According to a report published today, the Charity Commission looked into Fresh Start Housing, which registered as a charity in 2011, after a BBC investigation said it had been set up to act as a conduit to help a private business make money from housing benefit.

The Commission decided to investigate a claim that a letting agency connected to the charity, Investing Solutions, had been paid more than £5.5 million in housing benefit after receiving referrals from Fresh Start Housing, which was based in the same building.

The Commission visited the premises and questioned two trustees. It also inspected FSH’s books and records.

“We found that most of the trustees appointed since FSH was registered as a charity in 2011 had some form of business or personal relationship with the founder of FSH, who owned ISL, leading to us having concerns about the trustees having a conflict of interest and/or loyalties to the founder,” today’s report said.

“We found that most, if not all persons, who sought the charity’s help were referred to ISL to be housed, and ISL received a financial benefit from rents received. FSH received no payment for making the referral to ISL.

“We removed FSH from the register of charities on 1 July 2016 as we decided FSH was not and had never been a charity.

“We informed HM Revenue and Customs of our decision so that they could review and decide whether to recover any financial benefits FSH may have received.”