Vital Tax Breaks for U.K. Jewish Schools

British parents and schools are delighted by the decision of the tax authorities — Her Majesty’s Revenue and Custom (HMRC) — to allow gift aid to be claimed on voluntary contributions to schools.

State-aided faith schools in the U.K. receive government funding that covers the infrastructure and regular secular studies. Limmudei kodesh and other activities are funded by a system of voluntary contributions, as state schools are not allowed to request money from parents. Since the schools are registered charities and since the contributions are a donation, they are able to claim back the tax that would have been paid on this amount, from the government.

Over the last few years, there has been a dispute between the schools and HMRC as to the legality of this procedure.

The removal of this income would have posed a direct threat to the financial viability of many state schools who requested parental contributions, including Jewish state schools. This follows a concerted effort from the Jewish community, and represents a major win for all state schools nationwide.

For almost three years, some Jewish state schools have been unable to claim gift aid on voluntary contributions, whilst others have been waiting to hear whether claiming gift aid on voluntary contributions will be continued or, indeed, whether past gift aid claims would be clawed back.

PaJeS (Partnerships for Jewish Schools) therefore formed a Gift Aid Working Party to co-ordinate a response to HMRC and assist in moving towards a clear conclusion. Chaired by Rabbi David Meyer, executive director of PaJeS, the Working Party, which included experts on charity, educational and tax law from across the community, consulted on how best to represent schools, and submitted a full and detailed legal response to HMRC. Accountant Daniel Dover and his team at BDO led communications and held meetings throughout this period with HMRC and received the good news directly from them on Wednesday.

In conjunction with the Working Party, Lord Stuart Polak assisted in representing Jewish schools when meeting with both the HMRC and the Treasury. Daniel Green also assisted in this regard. There has also been invaluable support from David Goldberg QC, who published a tax paper on this matter and put forward his opinion that the current way schools claim gift aid is correct in law.

Jonathan Arkush, president of the Board of Deputies said, “The Board of Deputies and PaJeS welcome the decision by HMRC to confirm the longstanding arrangements for parental contributions.

“Furthermore, the decision represents a welcome clarification for state schools generally and will be seen by them as a vote of confidence. At a time when central and local government funding is necessarily tight, the confirmation of the status of contributions made by parents and families will directly encourage them to make donations and will go some way to ease pressure on schools’ budgets.”