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Wikimedia UK denied charitable tax status

Wikimedia UK denied charitable tax status
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Wikimedia UK denied charitable tax status

Finance | Tania Mason | 29 May 2009

HMRC has denied charitable tax status to Wikimedia UK, which supports the work of the American charity that runs the Wikipedia website, stating that production of an encyclopaedia is not a charitable purpose.

In rejecting the application, the tax regulator cited a legal precedent stating: “If the object be the mere increase of knowledge it is not in itself a charitable object unless it is combined with teaching or education”.

The board of Wikimedia UK applied to HMRC before the Charity Commission, but accepts that the same law would apply and so it is likely that it would have encountered the same problem.

In its guidance The Advancement of Education for the Public Benefit, the Charity Commission says organisations must provide evidence of educational benefit and states: “A modern example might be a ‘wiki’ site which might contain information about historical events but, if this information is not verified in any way, it would not be accepted as having education merit or value without positive evidence.”

However, Wikimedia UK is unlikely to let the matter end there. In an open letter published online, Wikimedia UK secretary Andrew Turvey responded: “HMRC’s objection goes to the heart of what we have been established to do.

“On the surface, it does not appear that any different wording in our constitution or correspondence would have given us a different outcome. Nonetheless, the legal issues may be arguable – our job is not just to produce content in isolation, but also to spread that knowledge and make it accessible to all. I should imagine this will come down to the finer points of law, and it is probably best to engage a lawyer at this stage when we appeal.”

Wikimedia UK is the UK chapter of the Wikimedia Foundation (WMF), which runs Wikipedia, amongst other projects. Wikimedia UK is an entirely independent organisation with no control over Wikipedia, although a large part of its activities is supporting the charitable work of the WMF.

Turvey has contacted the Wikimedia Foundation to seek contacts among UK lawyers who could help pro bono with the case. In the meantime, Wikimedia UK, which has income of less than £5,000 a year, has decided to stop referring to itself as a charity or an exempt charity, as it has up until now, and start describing itself as a ‘not-for-profit’ instead.

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