Reference: T1085/8/40
Section 30(1)(c) Finance Act 1921
Claim to exemption as a charity
I have to report that this appeal against the Board's refusal of exemption from tax in respect of the Press's profits from printing and publishing was heard on 11th November, when Mr Cyril King, K.C. appeared on behalf of the Press and Mr R.W. Quayle of this office on behalf of the Crown.
By the Statutes of the University of Cambridge it is provided that there shall be in the University the press Syndicate which shall exercise such functions in respect of the management of the University Press as may be assigned to it by ordinance.
By an ordinance it is provided that the Press will be managed by a Syndicate consisting of the Vice-Chancellor, the Treasurer, and fourteen members of the Senate.
The Syndics of the Press, who are not a corporate body, may therefore be described as a Committee of the University's governing body, and their activities as activities of the University, a charity.
The Press prints at a Press in Cambridge, and publishes from Offices in London. All property in which its activities are performed is vested in the Chancellor, Masters and Scholars of the University.
Separate accounts of the two businesses are kept, but the Syndics have put before them each year combined accounts. These combined accounts are under a Statute of the University admitted to two members of the University's Financial Board, and from time to time, the Financial Board "requests" that payments either from the Press's capital or profits should be made to the University Chest. Any such payments or the income arising from their investment by the University are of course in the absolute control of the University; and it was stated that as the Syndics are in effect only a Committee of the University's governing body, the "requests" could be orders. The Press's activities can be divided into six heads:
1. Sales of books published by the Press roughly 75% of the Press's turnover.2. Printing done for the University. 5.9%
Apparently it has already been agreed that profits on this work should be exempt.3. Printing done for Colleges (as distinct from the University), schools and outside examining bodies. 4.9%
4. Printing of journals for learned Societies, such as the Royal Society. 3.81%
5. Printing of Bibles for the British & foreign Bible Society. 1.2%
6. Printing for other clients. 5.7%
Except in a negligible number of cases the question of the publication by the Press of any book is considered by the Syndics at fortnightly meetings. The first thing they consider is the educational or learned quality of the book. The Press's Catalogue indicates beyond any doubt that its publications are practically without exception learned or at least educational e.g text-books; and any publication has on it the imprimatur of the Press. The Syndics are willing to publish books on which they know there will be a loss if they consider the books educationally valuable. Mr Roberts, the Syndics' Secretary, stated that the only reason the Syndics would not be willing to carry on their combined activities at no profit and no loss was the fear of depleting the financial reserves.
The printing side of the business is carried on with a few exceptions on a strictly commercial basis, and the bulk of the Press's profits came from this - the Publishing side usually made a loss. It was not in evidence, but Mr Roberts stated afterwards that a large amount of the printing profits came from the printing of books for the publishing side, but he admitted that this was a domestic matter between the two offices, it was clear that the combined activities produced profits.
The printing is of a high standard and special qualifications are needed for the class of printing done - e.g. mathematical books, or Greek or Sanskrit books, require not only special founts but highly skilled proof readers.
It will be seen from the classification of the Press's activities, and from the fact that a great part of the printing is done for the publishing side, that most of the printing is of an educational or learned nature.
It was contended on behalf of the Press that the University, a charity, was exercising the trade of printing and publishing in the course of the actual carrying out one of its primary purposes, within the meaning of Section 30(1)(c) of the Finance Act 1921. This contention was resisted on behalf of the Crown.
The Special Commissioners reserved their decision, giving a written decision on the 22nd November a copy of which is attached.
Signed ..... 9th December 1940