Inland Revenue CLAIMS BRANCH
References T1088/2/76, T/1085/8/40, X36122, C/R61007.
Date 17 May 1976
CAMBRIDGE UNIVERSITY PRESS
1. The Cambridge University Press has renewed its claim for tax exemption on its trading profits and is prepared to go all the way to the House of Lords in pursuit of this. Since the claim was previously turned down by the Special Commissioners in November 1940 (see flag 'C'), I am forwarding my papers so that Policy Division may advise whether or not, on the additional evidence supplied, the Special Commissioners' decision may be reversed and the trading profits exempted as being within the provisions of S360(1)(e)(i) ICTA 1970.
2. The Revenue has always accepted that the Press, although self-financing, is a department and therefore an integral** part of the University and the property and income have been exempted as part of the University funds which are applied for its general charitable purposes. The considerable evidence submitted by Mr Cass confirms the reasonableness of this opinion (booklet in attached pouch).
3. The historic evidence also supports the view that the aims and activities of the University in the field of the advancement of religion and the advancement of education extend to a wider public than the University. The University was given royal sanction by Henry VIII in 1534 to operate a printing press and to sell books in order to carry out its main purpose of providing education and learning, and various Acts and Letters Patent have confirmed this position. The historic background and further views are set out in the submissions dated 23 April and 7 May 1976 below [both missing from file - A. M.].
4. Our views on publishing educational books have of necessity been modified*** by the Court of Appeal judgment in Incorporated Council of Law reporting in England and Wales v. Attorney General (1971) 3 All ER 1029, that printing and publishing for the public benefit may in some circumstances be considered the charitable advancement of education, and by the Royal Choral Society judgment that the advancement of education does not necessarily mean teaching.
5. It would be open to the University to establish the Press as a separate commercial company and have the profits covenanted. S248(8) and (9) was intended to facilitate this method, but Cambridge University Syndic (sic) would probably be unwilling to relinquish the careful control and direction which they now exercise.
6. A word should be said on the possibility of a favourable decision on the Cambridge University Press establishing a precedent which others would seek to follow.
The Oxford University Press, X36506, C/r48909, was considered on Board's papers PS1199/1950, and both its position vis-à-vis the University and its tax position are the same as those of the C.U.P. We do not have all the well-documented evidence that Cambridge has produced, but we know the Oxford Press is run on the lines of a commercial firm and no longer restricts its publishing to purely educational literature. Possibly, it is acting ultra vires in its trading. Its case, if it made one, for having its profits exempted would be much weaker than the Cambridge Press. [XXXXXXXXXXXX]* University Press seems to be run on similar lines to Oxford, but [XXXXXXXXXXXX]* University has a separate commercial company.
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]* publishes and distributes not only religious literature, but secular books which are sold in its bookshops throughout the country. The main emphasis, however, is on religious literature (about 85%) and the the trading profits have been exempted on a de minimus basis.
I would not consider that exempting the trading profits of C.U.P. would establish a precedent since the historic position of the Press and its present function is most uncommon.
7. The court judgments and the persuasive evidence supplied invite the conclusion that the Cambridge University Press, as a department of the University, is exercising its trading in the course of carrying out a primary purpose of the University, ie the trade is an integral part of such a purpose, and that the dicta of Cohen LJ in CIR v. Tennent Plays Ltd, 30 TC at page 125, would not bite. The profits would therefore fall within the provisions of S360(1)(e)(i) ICTA 1970.
I should be glad to have Policy Division's directions on the claim. I attach for reference my files and the file from Cambridge 1 District, Ref 132.2412.
* Word/passage redacted by the Inland Revenue in 2009 under FoI exemption (s)41. Closed until 2019. Click for the collated Redaction puzzle-file, with scans.
** First we have, not for the first time on this website, McRobert's misuse of the word 'integral', the Shorter Oxford Dictionary definition of which reads: But of course a university does not necessarily have to run a press; it is not a necessary condition of being a university that it runs a press. OUP is undoubtedly a part (department) of Oxford University, but it is not an integral part of it; Oxford University would/could continue to be a university without a press, or if OUP stopped trading. See also my Oxford Times letter of 6/4/01.
*** Second, we have McRobert's assertion that the Revenue's position in the 1940s has to be modified in the light of the Royal Choral Society case and the Law Reporters' case. I will reserve comment on this assertion until a later file.
For McRobert's full-on volte-face of two years later, go straight to her parallel report on OUP. Was it perhaps made ultra vires?
"Of or pertaining to a whole. Said of a part or parts: Belonging to or making up an integral whole; constituent, component; specifically, necessary to the completeness of the whole."