Well, this is certainly going to give us something to talk/vent/rant
about tomorrow!

2009/4/25 Michael Peel <em...@mikepeel.net>:
> This is crazy. :-/ Where to start?
>
> First, fundamentally, the aim of pretty much everything is to
> increase knowledge. Teaching/education is merely a means to
> communicate that to people, which is something that an encyclopaedia
> natively does. To say that producing an encyclopaedia does not
> advance education - especially considering that this is Wikipedia,
> which has a huge impact - is simply wrong.
>
> Second, learning how to write an encyclopaedia - something that
> everyone who contributes to Wikipedia does - is inherently an
> educational experience. To support that naturally supports the
> advancement of education. To quote a law from 1957 - over 50 years
> ago - simply shows how out of date the law, and hence the goverment,
> is in this respect.
>
> Third, we're not all about Wikipedia. We're about the Wikimedia
> Movement, or even more generally, the free culture movement. That
> incorporates a much wider range of projects, including Wikiversity
> whose aim is explicitly to educate people, and a load of other
> projects that do this to a lesser extent.
>
> Fourth, stating that "the support the Wikipedia" is "the stated
> primary purpose of Wiki UK Ltd" is simply wrong; where does it even
> mention "Wikipedia" in our MoA/AoA?
>
> (There are more points, but I'm too tired right now to phrase them
> coherently...)
>
> We should definitely respond to HMRC about this; getting lawyers
> involved seems to be a very good idea. Is it worth contacting
> LawWorks regarding this?
>
> If we don't get anywhere with HMRC, then we should take this to the
> media - they'll have a field day with this.
>
> Mike
>
> On 24 Apr 2009, at 21:59, Andrew Turvey wrote:
>
>> Dear All,
>>
>> Yesterday we received a letter from the UK Tax Authorities
>> rejecting our application for recognition as a charity. Citing a
>> legal precedent, they stated that "the production of an
>> encyclopaedia is not the charitable advancement of education" and
>> therefore we were not established for exclusively charitable
>> purposes. The ruling they gave stated that "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 full letter from the HMRC is copied below with some explanatory
>> notes added in { }
>>
>> Their 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.
>>
>> If we had applied to the Charity Commission before HMRC the
>> application would have been considered by different lawyers but the
>> same law would apply. Therefore, it is likely that we would have
>> come up against the same problem.
>>
>> I'm contacting the Foundation to ask them if they are aware of any
>> lawyers familiar with UK law who could help us pro-bono on this.
>>
>> I'm also sending a note to our MP to thank him for his help in
>> speeding this up: although it is disappointed to get this response,
>> it is better to get it now that in 3 or 6 months' time.
>>
>> In the meantime, we should probably stop referring to ourselves as
>> a "charity" or an "exempt charity". Before receiving this letter it
>> was reasonable for us to do this as that was our honest view. Now
>> we know there is some disagreement over this, I suggest we should
>> describe ourselves as a "not-for-profit" instead. Whilst we can
>> still get Gift Aid declarations (HMRC have previously confirmed
>> this was ok) we should probably add a caveat on the form explaining
>> that our charitable status is contested.
>>
>> Regards,
>>
>> Andrew Turvey
>> Secretary, Wikimedia UK
>>
>> =========================
>>
>> Company Secretary
>> Wikimedia UK
>> 23 Cartwright Way
>> Beeston
>> Nottingham NG9 1RL
>>
>> Date: 17 April 2009
>>
>> Dear Mr Turvey,
>>
>> Wiki UK Limited (operating name Wikimedia UK)
>>
>> Thank you for your letter of 4 March 2009 and enclosures. I am
>> sorry for the delay in replying.
>>
>> I am aware that you have written to Nick Palmer MP {regarding
>> delays in responding} - a reply to that letter will be sent
>> separately to Nick Palmer MP.
>>
>> The definition of a charitable company for tax purposes is
>> contained at Section 506(1) Income and Corporation Taxes Act 1988
>> which states " 'charitable company' means any body of persons
>> established for charitable purposes only". However, the
>> determination of charitable status is a matter of general law.
>>
>> To be a charity in law it is not sufficient that a company's
>> activities or intended activities are charitable. The memorandum
>> and articles of association of the company must declare objects
>> that are charitable in law and be otherwise in acceptable
>> charitable form so that the company could only carry out charitable
>> activities.
>>
>> The objects of Wiki UK Ltd are stated at clause 3 of its memorandum
>> of association:
>>
>> "The charity's Object is to aid and encourage people to collect,
>> develop and effectively disseminate knowledge and other
>> educational, cultural and historic content in the public domain or
>> under a license that allows everyone to freely use, distribute and
>> modify content, by means including (but not limited to):
>>
>> [9 ways are them listed - for example 'acting as a voice and
>> representative for the community of UK residents and citizens who
>> use and edit such repositories'] "
>>
>> In your letters of 23 November 2008 and 4 March 2009 you state that
>> the primary purpose of setting up the company is to support the
>> 'Wikipedia' website. {We actually said "support the “Wikipedia”
>> website and the other projects of the Wikimedia Foundation, in ways
>> that are compatible with UK charity law"}
>>
>> The stated objects are not charitable in law. The production of an
>> encyclopaedia is not the charitable advancement of of education and
>> has not been accepted as such in law. In Re Shaw [1957] 1 WLR 729
>> Mr Justice Harman said "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". Nor is the support the
>> Wikipedia, the stated primary purpose of Wiki UK Ltd, a charitable
>> purpose.
>>
>> Wiki UK Ltd is not established for charitable purposes only as
>> required by the legislation and so is not a charity for tax
>> purposes. The charity tax examptions and reliefs (including Gift
>> Aid tax relief) are not, therefore, available to Wiki UK Ltd.
>>
>> To help us improve customer service, please quote our reference
>> number and provide a daytime telephone number in any correspondence.
>>
>> Yours sincerely,
>>
>>
>> Higher Officer, Technical
>>
>>
>
>
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