Chris Patten has defended Oxford University saying ‘nobody can accuse us of tax dodging’ in light of the recent Paradise Papers scandal. The papers have revealed Oxford and Cambridge, as well as nearly half of Oxbridge colleges, have privately invested tens of millions in offshore funds.
Speaking exclusively to the Oxford Student, Patten, chancellor of the university, said: “Oxford has a huge endowment which is invested by experts. The one thing nobody can ever accuse us of is trying to dodge tax because we don’t pay tax and nor do colleges. So, the real question is whether our investors should send money to places in the world where some others do dodge tax and I think that’s an interesting proposition but nobody can accuse us of tax dodging.”
Oxford’s status as an exempt charity means it enjoys tax exemption for income applied to its chief purposes that include, amongst others, the supply of learning. However, as an employer and service provider the University has other tax responsibilities.
The Chancellor added: “I think it’s very important that we should make investments where they’re likely to get the best returns within the law and within what is seemly and we need to do that in order to have more money to spend on things like subsidising students who need our help and developing the university in other ways as well.
“I think there’ll be a debate about whether anybody should invest money in the Isle of Man or Bermuda or the Cayman Islands but nobody can accuse us of trying to dodge tax.”
The Paradise Papers are made up of 13.4 million leaked documents that include the revelation that over 100 UK millionaires have been using offshore schemes to avoid tax payments. The Queen and Facebook have also featured in the leak.
The Papers have also revealed that Oxbridge invested in an offshore joint venture to advance oil exploration and deep-sea drilling.
Both universities have supplied funds to multibillion-dollar private equity partnerships based in the Cayman Islands, a popular tax haven commonly used by American and British hedge funds. The money is channelled through “blocker” corporations which means the universities can avoid or “block” a US tax on hedge fund investments. Dividends received are therefore tax-free.
Oxford has said offshore investments were in common use “in the investment industry, including higher education endowments globally” and that there was “robust oversight” of its assets.
The university has already been under pressure to divest fully from fossil fuels and the revelations are likely to lead to this pressure increasing.