The main corporation tax relief applying to the University is an exemption available to charitable bodies on any profits arising on charitable activity. In the University context, charitable activity is:
- the provision of education;
- research where the results are made publicly available; and
- services that are beneficial to the community including the provision of health related activity.
It is important to remember that the relevant test is whether the activity that gives rise to the profit is itself charitable, not how the profit will be spent.
E.g. The provision of consultancy is not a charitable activity and is liable to corporation tax even if the income derived from the consultancy will be used to support educational activity.