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No income generating activity should put the University’s charitable status at risk. Institutions must consider whether any new income-raising venture falls within the University’s core charitable activity. Broadly speaking, charitable activity in the University context equates to the provision of education and supporting services, and the pursuit of research where the results of that research will be fed into the public domain. It is important to remember that the test is applied to the activity itself and not its intended result.

For example, an institution may decide to raise funds for its educational activity by selling t-shirts. Although the result of the activity is that education is improved by the profit made, the activity itself, selling t-shirts, is not a charitable activity.

The University may only engage in non-charitable activity to a very limited degree. If the University engages in significant trading activity which is not charitable, that activity may be liable to tax at 30% of profits. Ultimately, extensive non-charitable activity may threaten the charitable status of the University. For this reason, as per the financial regulations, institutions must consult with the Tax Team prior to commencement of a new income-generating activity.

If an institution wishes to embark upon a non-charitable trading activity, Cambridge Enterprise Limited must be contacted.

Latest version 16 April 2024.

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