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Tax threat to Jewish schools

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Talks are going on with the tax authorities to prevent a change in policy which could cost Jewish schools tens of thousands of pounds a year.

For many years, state-aided schools have been able to claim as tax relief on contributions made by parents towards the cost of Jewish studies and security.

Higher-rate tax payers have additionally been able to reclaim some tax on the payments, which have been treated as charitable by HM Revenue and Customs.

But in the past 18 months a number of schools have been challenged by the Revenue over whether parental contributions can continue to qualify for tax relief through Gift Aid.

An HMRC spokesman said that although it could not comment on individual cases, "generally Gift Aid is only available on freely given donations, for which nothing is received in return."

Jewish schools were briefed last night by the Partnership for Jewish Schools (Pajes) which is co-ordinating the response to HMRC.

Pajes chief executive Rabbi David Meyer said, “We have put together some of the best and brightest experts, all of whom are offering their time on a voluntary basis.”

Leading accountants BDO UK have been “very helpful” in putting the schools’ case, he said.

The schools argue that the contributions made by individual parents do not go directly to their child and therefore should remain eligible for charitable tax relief. “The children in a classroom all get the same service, irrespective of whether their parents donate money,” Rabbi Meyer pointed out.

If the authorities no longer allowed tax relief, the impact on a one-entry primary school, he suggested, could be that it would have “to consider reducing its staff by one member” or find alternative funds.

“At the moment, it is a waiting game,” he said. “Hopefully, we are coming to a resolution.”

The Treasury has independently called for a review of Gift Aid arrangements in general.

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