OXFORD University Press has rejected allegations that it was in breach of tax exemption conditions by transferring millions of pounds to Oxford University.

The claims come in a controversial book which mounts a full-scale assault on OUP's reputation as a world-famous publisher. At the centre of a long list of allegations is one that the OUP is handing massive sums to the University in contravention of the terms of its tax-exempt status.

The author, Mr Andrew Malcolm, claims that OUP was granted tax exemption on condition that it did not fund the University but ploughed surpluses "back into unprofitable publishing like poetry and music". OUP was granted tax exemption in 1978 and now has an annual turnover of £308.5 million.

Mr Malcolm, who won a four-year legal battle with OUP, says that as well as funding the university to the tune of £10 million a year, the OUP has amassed "an undisclosed" fund for the university amounting to £130 million. After we showed the OUP advertising material and sections of the book, The Remedy, it accused Mr Malcolm of a series of errors.

The OUP's public affairs manager, Ms Caroline Pailing, said: "The OUP was granted tax exemption on the grounds that it is an integral part of the university, which is a charity, and because OUP's publishing activitles are in direct furtherance of those charitable aims. Beyond this; the exemption is conditional only on the basis that profits are applied for charitable purposes only, which clearly covers transfers to the rest of the university." OUP, which has its headquarters in Walton Street, says that it has handed over more than £6 million a year over the last three years. It confirmed that a £140 million reserve fund existed "to protect" the university, which had unlimited liability for the actions of OUP.

Ms Pailing also defended OUP's right to make profit. "Of course charities may create surpluses. It is the use to which those surpluses are put that is relevant. The OUP's surplus is exclusively utilised in furtherance of the University's charitable objectives either by the OUP directly by the rest of the university."

Mr Malcolm, of Brighton, has been a persistent critic of OUP since winning a court battle in 1990 for breach of a "gentleman's agreement" to publish his book, Making Names. OUP was criticised throughout the legal hearing for "harsh and unfair treatment" of Mr Malcolm, and ordered to pay his costs.

His allegations are in a new edition of The Remedy, his book about the court case, which is expected ts be published in a few weeks. The book seeks to cast doubt over OUP's assertion that it enjoys charitable status as part of the university. It also attacks OUP's "shameful" desire to axe its contemporary poetry list in February in the face of widespread opposition. OUP later reversed its decision to drop 50 poets after reaching a partnership agreement with a specialist poetry publisher, Carcanet.

Click for the next item in the Malcolm v Oxford saga or for Andrew Malcolm's subsequent response letter

Click for OUP facing huge tax bill Oxford Mail 21/3/01 and A Message from India Oxford Times 30/3/01 reports on OUP's loss of its Indian tax-exemption. Its 1999 'donations' to the university are also admitted to be bogus.