§ Mr. BeithTo ask the Chancellor of the Exchequer what representations the Inland Revenue has received from universities about tax treatment of consultancy earnings, holiday lettings and conference facilities; and what response has been given.
§ Mr. MaudeThe Inland Revenue has recently had discussions about the tax treatment of these activities with the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom, at the committee's request.
The Inland Revenue has explained that universities are entitled to the same tax exemptions as other charities. Trading profits are exempt only where the trade is exercised in the course of the actual carrying out of a primary purpose of the charity, or where the work in connection with the trade is mainly carried out by beneficiaries of the charity. Profits from other trading activities are likely to be taxable, in the same way as for other traders. The outcome in each case will depend on its own particular facts.
The Inland Revenue is seeking further information to assist in determining whether any particular activities give rise to taxable profits.