Inland Revenue CLAIMS BRANCH

Reference X36506

OXFORD UNIVERSITY PRESS

1. Predictably, following the Cambridge University Press claim for tax exemption on its trading profits ("T" papers 1088/2/76) the Oxford University Press has renewed its claim that, since the Press is a Department of the University, the publishing trade is exercised in the course of actually carrying out the University's primary educational purpose and exemption is due under S360(1)(e) ICTA 1970. The written application is numbered (1) in the attached pouch. Previous correspondence was dealt with at papers PS1199/1950.

2. The comprehensive note attached flagged "X" describes the range of the OUP's trading interests and gives the historic background which parallels that of the Cambridge University Press.

The OUP has no separate governing instrument and is established under the Royal Charter of 1636 as a Department of the University to advance education both within and without the University. Its assets are held on trust for the University's general purposes. The publishing business covers a much wider spectrum than that of Cambridge and in some areas is more commercial in character with a number of overseas branches. The Press is administered by Delegacy, the delegates of which are appointed by the University (which corresponds to the Cambridge University Syndic), but the OUP does not exercise such a close control and supervision on the books published. As the trading interests of the Oxford Press are much greater it may not be possible to vet every publication individually as happens at Cambridge, although this is done with regard to the Clarendon Press, which produces the "learned books".

3. I think it is true to say that today the OUP in practice is a business enterprise of worldwide importance, indeed it is evidently the largest publishing house in the UK, enjoying a high degree of autonomy from the University. It is in the size and scale of its operations and its more commercial organisation that it differs from the Cambridge University Press and it has clearly become a more general publishing house in direct competition with other commercial publishing firms despite the publication of a large percentage of learned and academic books. It is possible too that the OUP's future developments may be directed to an even wider range of commercial publications whilst retaining its scholarly and educational books. The amount of tax at stake is substantial.

4. Owing to a wider range of literature published by the OUP and the considerable size of its trading operations as a publishing house, I think the claim for tax exemption is a weaker one than that put out by the Cambridge University Press. Although the OUP is a part of the University and subservient to the University's educational aims, the size of the trading carried on and its scope is such that it is almost a case of "the tail wagging the dog". I doubt, however, if we could resist the claim having accepted that of the Cambridge University Press. Both Universities and their Presses have a similar historic background differing quite markedly from other Universities in that their Charters specifically authorise them to spread learning beyond the confines of the Universities. The Court of Appeal judgment in Incorporated Council of Law reporting in England and Wales v. Attorney General (1971) 3 All ER 1029, that the issue and sale of publications may in some circumstances be the charitable enhancement of education, reinforces the claim of the Press for tax exemption on its publishing profits because it is part of a charitable institution established for the advancement of education and learning. As the "trade" is being exercised in the course of actually carrying out the primary purpose, it would not come within the dicta of Cohen LJ in Tennent.

At present I think that the poise of the OUP is toward the publication of learned books, academic textbooks and mainly educational books. Provided therefore that the poise did not in the future change to more general commercial publishing, I think the OUP has made a case for exemption of its profits under S360(1)(e) ICTA 1970.

5. I shall be glad to have Policy Division's advice and direction on the claim and attach for reference:-

i. X36506; C/R48909, Oxford University Press

ii. Q11220, District file from Oxford 1

iii. Four pouches containing the documentary evidence.

N.B. Partly owing to pressure of work and part because of the amount of reading matter submitted to substantiate the claim it has not been possible to deal with the case quickly and I should be grateful if some priority of treatment could be given.

Miss Betty M McRobert
T3/4 Claims Branch (Charity)
15th August 1978

COMMENT. McRobert's tone and conclusion here are in perfect, startling contradiction of her own report on CUP just two years earlier, when she went out of her way to assert that a decision in CUP's favour would not set a precedent for OUP, whose publishing 'poise' she then strongly contrasted. What could possibly have happened during those two years? - A. M.