​Kids Company had nearly £600,000 due to Inland Revenue written off by government

Employees’ tax payments were used by a charity to stay afloat instead of being paid to the Inland Revenue, it has been revealed.

Camila Batmanghelidjh, who this week stepped down as chief executive of under-fire charity Kids Company, said she had been put under pressure by government to resign because she had criticised their policies.

However it has emerged the charity found itself unable to pay a National Insurance bill of £590,000 in 2003 which was subsequently waived because government officials believed the charity was too high profile to wind up.

The Cabinet Office said last week it wouldn’t release £3m of funding due to the charity unless Batmanghelidjh resigned.

Minister’s said the move was needed because they had grave reservations about the charity’s governance, which the tax write off appears to back up.

A spokesman from Kids Company said about the bill: “In 2002, there were a high number of vulnerable children with complex needs attending Kids Company who were not receiving statutory support.

Resources were focused on meeting vulnerable children's needs

"The organisation experienced a delay in making NIC payments to HMRC as resources were focused on meeting these vulnerable children's immediate needs.

“Kids Company worked with the HMRC to agree a partial payment of NIC. The HMRC recognised that their actions made a significant contribution towards helping support some of society's most at risk and vulnerable children.”

Kids Company became one of the highest profile children’s charities in the UK due to Batmanghelidjh’s charismatic leadership, enticing David Cameron as well as a host of MPs and celebrities to its cause.

The organisations had a turnover of over £23m last year from which Batmanghelidjh herself was paid a six-figure salary.

England’s Charity Commission said it was “urgently assessing” the charity’s finances.