Inland Revenue Commissioners v Oldham Training and Enterprise Council: ChD 11 Oct 1996

The court was asked whether Oldham TEC was established for exclusively charitable purposes. The Commisioners now appealed against a finding that tey were.
Held: The appeal succeeded. The promotion of commerce is not capable of being a charitable object per se. The objects of the company contained two main objects and three subsidiary objects, that the first main object, promoting and providing vocational education and training and re-training, was in itself charitable, and that the first two subsidiary objects were ancillary to the first main object, and did not detract from its charitable nature. The issue arose in relation to the second main object, namely ‘to promote industry, commerce and enterprise of all forms for the benefit of the public in and around Oldham’, read in the light of the third subsidiary object.
Lightman J observed that they show indicia of charity, in that it was an altruistic organisation, prohibiting benefits to its members and being set up to assist others, with emphasis on the overall objective of benefit to the public, or the community, in and around Oldham, and He posed the question as being whether the other object was to be read as subject to an implied limitation ‘so far as charitable’, and sought to answer it only by reference to the terms of the memorandum of association, except as regards evidence of whether an object, identified by the normal processes of construction, is charitable in its nature.
He concluded: ‘Under the unamended objects clause, the second main object, namely promoting trade, commerce and enterprise, and the ancillary object, of providing support services and advice to and for new businesses, on any fair reading must extend to enabling Oldham TEC to promote the interests of individuals engaged in trade, commerce or enterprise and provide benefits and services to them. Paragraph 4.2 of the statement of agreed facts shows that Oldham TEC in the form of the provision of enterprise services does exactly this. Such efforts on the part of Oldham TEC may be intended to make the recipients more profitable and thereby, or otherwise, to improve employment prospects in Oldham. But the existence of these objects, in so far as they confer freedom to provide such private benefits, regardless of the motive or the likely beneficial consequences for employment must disqualify Oldham TEC from having charitable status. The benefits to the community conferred by such activities are too remote.’
Although the object in question stipulated that the promotion of trade, commerce and enterprise was to be for the benefit of the public (or, in the amended version, the community), nevertheless the private benefits which were or could be conferred by the pursuit of this object were not merely incidental or subsidiary to the public benefit, and that for this reason the purpose was not charitable.


Lightman J


Times 11-Oct-1996, [1996] STC 1218


Income and Corporation Taxes Act 1988 506(1)

Cited by:

CitedHelena Partnerships Ltd v HM Revenue and Customs CA 9-May-2012
The company had undertaken substantial building works and sought associated tax relief. The court was asked whether, following a change in the company’s memorandum and articles of association, the company, a registered social landlord, remained a . .
Lists of cited by and citing cases may be incomplete.


Updated: 08 April 2022; Ref: scu.82355