The UK Charity Commission is refusing to grant charitable status to a church because it restricts communion services to members only.
Parliament is currently holding hearings on the matter.
In a letter to Plymouth Brethren church leaders, the Commission cited a recent court decision to suggest that religion does not serve the public good.
"This decision makes it clear that there was no presumption that religion...is for the public benefit, even in the case of Christianity or the Church of England," the Commission said in the letter.
A conservative member of Parliament said the Commission is, "Committed to the suppression of religion."