Heritage railway ticketing - best options , pro's and cons

It is difficult to quote actual figures as they seem to be a closely guarded secret. However, if we take your figure of £450K of gift aid that, at 25%, equates to an actual gift aided ticket sale of £1,800,000. At the take up rate of 70% which you quoted my slide rule calculates an 'all line' ticket revenue of about £2,571,000 and taking an all line ticket to be £49 that equates to about 52,500 passengers. Even if we allow for kids going free on a 1 to 1 ratio that's only about 105,000 passengers. As late as the 2022 accounts the railway was suggesting it was carrying 300,000 passengers/year (although I doubt that was a true statement) so that indicates a significant drop off in fare paying passengers since the scheme started. Whether that is due to customer resistance to the high price or a real and significant downturn in people wanting to travel on the railway I don't know.

 

I agree with all three of your points. The phrase "all your eggs in one basket" comes to mind with the third point. On the second point, I've seen either more vacant turns or last minute fills on special events (depends on how important the turn is) since COVID and the general reduction in services. A reduced baseline requirement means a special event service will strain manpower.
Your last paragraph has been my thoughts for quite a while, well before 2020.

 

Something that should be remembered is that there will be variation in the passenger market for different railways. The SVR is generally Day trippers while the NYMR is more people staying away for a period of time (generally a week). It has an effect on the passenger flows and thus the service requirements (NYMR run a more intense service Mon-Thurs, the SVR on a Saturday). It will have an effect on what model of ticketing is more suitable.

 

Speaking personally, as a volunteer I would obviously want an opportunity to 'play trains' and have been greatly enjoying seeing busy trains over the last few weekend, but I would be reluctant to help if the only people benefitting were a smaller number of the 'well off'.
Re: your second point, it's not just train crew duties, but I expect volunteer recruitment in general would also suffer. How many volunteers only became interested in volunteering as the result of a visit. Reduce the number of visitors and . . . .

 

I am sympathetic to the point about premium pricing. Mainline is obviously different - with the exception of a few services such as the Shakespeare Express, mainline steam is already out of reach for anyone who isn't quite a committed enthusiast. My general feeling is that my local line (the SVR) currently gets things about right, with reasonable standard fares and often very well patronised premium offerings such as the dining trains. It will be interesting to see what pricing structure is used as and when the restructuring is approved. No, it's not 2019 any more and it's very unlikely indeed that we'll ever go back to those days. But is rightly often said, if you start charging £50 a ticket then you're going to have to provide £50 of value, or people won't come back or even visit in the first place. "Our costs are going up" is true but is not a compelling argument to make to a parent whose costs have also gone the same way.

I plough a bit of a lonely furrow on this point I know, but I personally dislike Gift Aid bringing tangible benefits such as a yearly pass or a free return to the donor, since in some cases those who don't GA aren't choosing not to but (because of not paying income tax) simply don't have the option. When I brought this up elsewhere a while back the response was... not dismissive exactly, but along the lines of "I've never experienced this". I'm personally acquainted with two people who would be affected, both at least somewhat interested in heritage railways, and read of another not so long ago in Which? magazine (a man who retired early and was living off savings for several years, hence no IT due) so perhaps that's why my view is slightly different.

Presumably also whether a railway goes "from somewhere to somewhere" and whether there are intermediate stations with more than very niche attractions. The SVR scores well on both of those points, though I confess I don't know many people buy just the short hop from Kidderminster to Bewdley and back. It's something I've recommended to a couple of people this year who weren't sure whether their kids would want to stay for a full day, but were happy to know about the much cheaper (£8/£5 at 2024 prices) short hop option as being less of a risk if it didn't work out. As an aside, if these shorter journeys won't qualify for GA under the new setup, I wonder whether the railway would price them as keenly.

Another factor which might be relevant is this: some people are more interested in *seeing* a steam train (or a heritage diesel!) than riding on one. This isn't the case for all heritage railways, but the SVR has lots of roads and other rights of way running very close by and on most running days doesn't restrict access to its stations, so anyone can do this for free. If a day out with your family is going to cost more than you think is reasonable, you can still take them to somewhere like the road bridge at Arley and watch trains come and go, then go for a pub lunch somewhere else. People do this a bit now, yes, but I suspect it would happen more.

Things change, and heritage railways have to change too. I get that, and indeed as an SVR member I fully intend to vote in favour of that railway's restructuring next year. I also recognise that I am not an expert and that the people who set ticketing prices and options know a lot more and see a lot more data on this than I do. But as Jamessquared said in his very interesting post, many railways have been losing passengers for some time. Is that going to continue, or can the decline be arrested - and how much influence do ticketing prices and structures have on that? I really don't know.

 

I see a decent number of KR-BY returns and short journey tickets in general. It's sometimes overlooked.

 

Just replying on this, the key point to be aware of is that the Gift Aid regulations require either an enhanced payment, or that the attraction provides annual admission. For those of us who are taxpayers, it's a worthwhile trade-off - but I do acknowledge that it excludes some who can't Gift Aid.

My view is that sensitivity is required here, but that the concerns about who can benefit shouldn't rank above the commercial decision about how best to structure fares to maximise yield in short and long terms.

From experience administering Gift Aid, I'm also conscious that how much Income Tax people pay is a source of confusion. This is especially true of pension income, where a surprising number of people don't realise that occupational pensions are treated like employment pay, and subject to Income Tax. I can think of a number of people I've dealt with who I am certain are taxpayers, but who have decided not to Gift Aid their donations rather than risk being wrong. That however is a wider tax system issue.

 

I wonder sometimes whether the government will consider abolishing or severely restricting Gift Aid in a bid to reduce expenditure. If it does,we are suddenly left with another great hole to fill.

I don't,for one second,think it is set in stone. It would be unpopular with some,but so was removing pensioners' winter fuel allowance.

 

I think they'd be reluctant to kill it, for two reasons. The first is that tax relief for charitable giving has generally been seen as a good thing, to be encouraged. The second is that a lot of charities would suddenly be cutting services and/or demanding more subsidy.

I could see the applicability being restricted - and treating donations to visitor attractions as eligible for Gift Aid would be one of the easier ones to target.

 

I must admit I have had some of those thoughts, especially as my own experience of GA is somewhat limited, although a couple of years back I signed something for Swanage which I think was linked to an appeal.
I keep picking up snippets on here about how the NYMR scheme works, but as I understand it is only if you travel the whole line, or at least buy that ticket for that which gives you "the deal" What stops you getting off earlier or doing that on subsequent visits, or using it as a day rover?
It does appear to be a solution aimed at (I suspect unintentionally) restricting travel opportunities for the poor who do not pay tax. Which I guess fits in well with Ms Reeves Winter Fuel Policy and today's announcement penalising female pensioners.
From memory all I have ever done is give a name and address on the form, not had to show any photo ID, so what stops me passing on the year of free rides to anyone who may be going to that area on holiday, as long as I tell them to say they are me?
Likewise I guess I could not buy this "opportunity" for someone who does not pay tax as a gift.

How GA may work for a shorter line than the NYMR or the SVR I am not sure, but buying one round trip Swanage to Norden (say at a GA fare of £30) in lieu of season ticket would seem a cracking deal to me for a year's travel.

As an aside I do not agree with your mainline steam comment, with one of two exceptions of a special event, or a new loco, I believe the core market is no longer the enthusiast, they in some cases are just more frequent repeat passengers. The market is those that have the money and want a different (and often unintentionally very interesting) day out.

 

I'm pleased to hear it. I've thought for a long time that KR-BY makes a very good "taster experience" given the ability to combine it with a couple of hours in Bewdley town.

Thank you, and that's entirely fair. I hadn't registered that the regulations were so prescriptive on this point, which is my fault as I'm sure it's been mentioned in the past. I still rather wish they weren't (I feel if you get something back, it feels less like "pure charity" and a little more transactional) but obviously you can't just decide on doing something non-compliant instead.

The other possibility is if significantly fewer people pay income tax. It's only a decade or so since tax thresholds were regularly being increased above inflation, and one of the larger UK parties said at the last election it wanted to set the boundary at £20,000 and to exempt NHS workers altogether. As things stand, all those people would have become ineligible to use GA.

Yes, that was lazy of me! I should have said something like "...already out of reach to those without quite substantial disposable income".

 

There seem many myths about Gift Aid. The scheme has remained basically unchanged since at least 2012 (when I first started dealing with it), and it is very simple:
* A taxpayer declares that they wish the Income Tax and CGT tax they've paid on a donation to be given to the Charity.
* The charity records that declaration
* The charity claims the tax back from HMRC

There are some other wrinkles - the Small Donations Scheme (don't ask...!), the ability for higher rate taxpayers to reclaim tax - but they don't affect the core.

What we're discussing here are some specific features of Gift Aid that apply to charities whose main income source is admission to the sites they manage. Those are governed by HMRC rules that have, again, remained basically the same since at least 2012. They work really well for things like museums or stately homes, but are more complicated when applied to a railway.

If you start from there, things like the treatment of tickets for part of the line, or why non-taxpayers don't get the benefits from donations, make a lot more sense.

I'll finish. If you pay tax on your income, please, please, please, allow the charities you give to to collect Gift Aid on your donations. For every £10 you give to the charity, that's £2.50 extra that the charity can get instead of Rachel Reeves.

 

The last government were, and it's reduced the amount of Gift Aid that charities receive from pensioners as a result.

It was Reform. I'll leave you to think what that might mean to medical charities

 

Just a bit of clarification / explanation on Gift Aid:
“Donations” qualify for gift aid if they:

• are 10% or more than the normal admission fee, or
• allow admission for at least 12 months

However, visitors must be given the right of entry (eg offered a 12 month pass) whether or not they can or want to gift aid, ie none gift aiders are not excluded. I also understand NYMR used to follow the 10% rule but that there was little take up, but since offering the 12 month pass that gift aid take-up has now increased to some 70%, and which enables the holder to hop on / hop off on all “regular” services as they so wish. I also note the returnees can be asked for photographic ID (to ensure the “annual pass” is not being abused by being passed to friends or neighbours).

It also seems that the NYMR only offers three basic ticket prices as this is based on HMRC guidance for gift aid. Thus:
- Three or more stops (think of visiting a country house and gardens) on which Gift Aid and the 12 month pass can be offered
- Two stop (think of visiting the house only), on which gift aid nor a 12 month pass can be offered
- One stop (think of visiting the gardens only), similarly as per two stop, on which gift aid nor the 12 month pass can be offered.

 

I think it is unlikely that the Government would remove GA completely, though they could of course amend the rules around what exactly counted as charitable. (I've always found the use of GA on heritage railway tickets odd, for example, despite the fact that clearly some lines have managed to do so).

In the more straightforward case, such as donations to an obviously charitable endeavour, GA has the obvious benefit for Government that it enables charities to leverage considerable private donations. The fact that the Government is willing to give a charity £2.50 enables that charity to obtain £10 of donation from a private individual, which might not be forthcoming if the Government removed the scheme.

That is not just a matter for the charity: it would also be a matter for the Government for any service that it considered of sufficient national value that it felt compelled to step in if the charity failed. So for many charities, the Government might find itself on the hook for back filling £12.50 of value if it tried to remove £2.50 of Gift Aid - hardly a good return.

Clearly it wouldn't do that for all charities - but it would probably be compelled to do so for many.(*) Quite apart from the outrage, therefore, I think that analytical heads in the Treasury must have made a fairly hard nosed calculation that Gift Aid is essentially an investment in Government finance terms, not an expense - in other words, removing it would see Government spending rise by more than was saved due to the inevitable need to provide services currently being provided by charities.

(*) For example - suppose a hospice supported by charitable donations and Gift Aid collapsed because the Government withdrew Gift Aid. You couldn't just abandon the patients, so the Government would be compelled to step in and either keep the hospice running, or bring the patients into a hospital - either course of action would be considerably more expensive than the comparatively small contribution they would make through Gift Aid.

Tom

 

I hope the legislation on school fees isn't a precedent for trying to define when charitable activities are and are not charitable. Charities are charities, and donations are eligible for Gift Aid - this is not a government gift, but a reallocation of the donor's tax. Whether I give that to my church, the NT, a railway - or my old school.

If the government were to limit Gift Aid, I'd expect them to try two lines of attack:
1. Close down the Small Donations Scheme (this really is government spending, not a reallocation of tax)
2. Stop Gift Aid on admissions outright - basically emphasising that a donation is just that.

I think 1) could happen quite easily and quickly - it's lowish in value (capped at £2k/yr per charity). 2) would be more interesting, and I suspect bring in the question of displaced expenditure - if the NT lose that income stream, they'll come asking for more elsewhere.

 

that Sidmouth 4me has clarified that return free during 12 momths facility does not discriminate against non taxpayers. It is avaialble to all those paying the full All Line fare whether or not they choose to Gift Aid. In practice between 70 and 80% do

 

Am I reading this right? You are saying that I can book a "12 month pass" for (I believe) £49 that allows me to return multiple times through the year, and I don't have to sign up for the Gift Aid?

That sounds incredible value for money - so what is in it for the NYMR?

What is the fare for a normal one-day-only return journey?

Tom

 

In contrast the pay 10% more Gift Aid option is only available to taxpayers so will distinquish between those with incomes above and below the tax threshold. What that flags up for any heritage railway that is a charity is the requirement that its charitable services must be reasonably affordable by the poor. Who's included in that category is rather unhelpfully not defined. It probably doesn't mean all services so a cheap shorter journey option should suffice. Nevertheless charities need s to be wary of pricing that only the wealthy can afford.

 

Tom, I think its actually £49.50 but you're right. Gift Aid is optional but since it doesn't cost paying passengers anything around 70 /80 % of them sign up effectively increasing their fares paid by over £12 a head. What's in it for the NYMR is around £450k additional income. Returns during the year are around the predicted 20% level and some get excited that means loss of income. That would only be true of those who would have made further paid trips during the twelve months which would be an even lower precentage. For those that do return then as long as they are not deterring another paying passenger from travelling there's no cost involved. An otherwise empty seat filled free of charge costs practically nothing but opens up the opportunity for secondary spend.
The fare for a normal one-day-only all line return journey is the same.