PEEBLES Community Council “only found out by accident” that the town’s common good fund had lost its charitable status, according to the group’s chairman.

Last year the Office of the Scottish Charity Regulator (OSCR) ruled that Scottish Borders Council’s (SBC) common good funds did not meet the charity test.

Subsequently they were removed from the Scottish Charity Register on March 31.

A result of the funds not having charitable status is that tax will be paid on interest from any cash balance.

In addition there may be implications for charging value added tax on lettings and the amount of VAT relief.

Peebles Community Council chairman Peter Maudsley said: “I understand that the Peebles Common Good Fund does not meet the criteria laid down for a charity and is therefore being removed from the register. 

“Having read the judgement, this is fully understandable. 

“However, to date this has not been raised during meetings and our community council has only found out by accident.”

SBC administers common good funds for Peebles and Innerleithen, among others across the Borders.

The OSCR found that the common good funds were not bodies with a constitution distinct from SBC. 

Its judgement stated: “The assets of the fund are held in trust by SBC but this arrangement does not involve the creation of a trust or any other form of body that is separate in identity from SBC. 

“While the financial accounting for common good funds is carried out separately from the council’s main accounts, this is for the improved transparency regarding the use and treatment of the common good funds and does not denote a distinct body.

“As such, we concluded that the fund is not a ‘body’ with a constitution distinct from Scottish Borders Council that is capable of being entered in the register.”

An SBC spokesperson said: “No common good funds in the Borders are registered as charities following the ruling by OSCR. 

“They were registered by Scottish Border Council’s predecessor Local Authority Borders Regional Council prior to 1996, and they have now been de-registered. 

“No local authority common good funds now qualify to be registered as charities under the OSCR definition of a charitable body.”