Jewish schools fear loss of ‘tens of thousands’ after gift aid clampdown

by Justin Cohen

Tens of thousands of pounds could be lost from the annual income of the community’s schools following a nationwide review into the awarding of gift aid on parental contributions.

Hundreds of state-aided schools have had the opportunity to claim gift aid on voluntary contributions in recent years, but HMRC began questioning the eligibility of the payments in 2014, since which a number of institutions have had gift aid withheld.

“Their view is the child of the parents contributing receive a direct benefit from the contribution,” said Partnership for Jewish Schools executive director Rabbi David Meyer. “We have got strong arguments against that – particularly the fact that a child whose parent is contributing and one who is not will be sitting in exactly the same class and receiving the same education.”

PaJeS stressed the move was “a broad-based review rather than about Jewish schools”, but said a “handful” of primary and secondary schools in the community have already been affected. While many still receive gift aid, it warned “the indications we’ve got from HMRC is that they will stop all schools”.

An HMRC spokesperson told Jewish News: “We don’t discuss identifable cases. Generally Gift Aid is only available on freely given donations, for which nothing is received in return.”

Increasing numbers of schools – both inside and outside the faith sector – ask for financial contributions from parents, with Jewish studies a primary use of the funds in the community’s schools. The largest schools with the highest level of contributions faced an estimated potential loss of over 100,000, Rabbi Meyer claimed. “It could go down to a few thousand for the smaller schools but I would have thought on average it’s in the tens of thousands.”

A cross-communal working party put together by the umbrella body to address the issue includes experts on tax, charity and educational law, representatives of leading firm BDO and Board of Deputies president Jonathan Arkush. The group is now waiting on the result of a submission it has lodged with HMRC, supported by a top QC.

If that fails and a possible tribunal finds against their case, educational figures are hoping that the Treasury – which is conducting a separate review of gift aid in all charitable sectors – will separately clarify the law pertaining to schools. “Our hope would be if the HMRC turns around and says they think the law at the moment negates the possibility of claiming gift aid, they will clarify and support us,” said Rabbi Meyer, who convened a meeting of school governors to discuss the issue last week.

“This is clearly potentially a very significant problem for the community which would impact the vast majority of state funded schools and a significant amount of money could be lost from their revenue. Inevitably this is going to mean either parents are going to be asked to contribute more or the schools are going to have to look for efficiencies to be made – or most likely both will have to happen. PaJeS is playing a role in trying to help to represent the case of the schools to HMRC and to help keep schools informed of all developments.”