North Yorkshire Moors Railway General Discussion

Assuming the Charity's governing document allows donations to be returned (it isn't guaranteed, it has to be explicitly included AIUI), they can be returned in certain circumstances. The guidance is very clear that the responsibility for doing so lies with the Trustees; it is possible to delegate to staff the decision on returning donations, but not the responsibility.

The guidance describes the types of consideration that might come into play before deciding on returning a donation, reputational impact being one such consideration. (That covers the situation of receiving a donation from Mr Dodgy to put his name on your shiny new facility, before you subsequently learn that he made his name as a clandestine arms dealer). Another consideration is the financial impact on your charity of returning a donation. In that light, the guidance notes that returning a donation is more serious than refusing it in the first place, the logic being that you may already have expended money delivering what the donation was there to support, and if you return the donation, you now have unfunded expenditure. (That would be the situation where you have not only accepted money from Mr Dodgy to build your shiny new "Peace and Tranquility Library" but have already built it by time you discover he was an arms dealer ...)

Another key point in the guidance is that if you do return a donation, that you document the reasons for doing so.

Additionally:

"If you are deciding to return funds, you may need specialist advice on:

• how to show the return in your charity’s accounts
• any gift aid or other tax implications"

The way the guidance is written suggests to me that returning a donation is very much assumed to be an exceptional act, not a regular part of operating practice.

In the NYMR case, I can see that at least in principle, you could find a route to "return a donation", and that could be delegated to staff at the station. However, I would expect that could only happen by virtue of a charity policy about how that could occur, with evidence that the Trustees had considered all the relevant factors in setting a policy. The Company Ts&Cs alone aren't sufficient, since they are essentially something put in place by the trading company; they do not in themselves demonstrate that the Charity Trustees have given due consideration to how returning of donations should be handled. In particular, while any single returned donation may only be ca. £100 (2 adults and n children travelling on one donation), if there was serious operational problem, the total returned donations from a single day could run to thousands of pounds, as well as the foregone Gift Aid. That is an amount of money that is very material to the charity, and you would assume would require the Trustees to have considered in the light of the guidance given, either there and then, or at least to have a documented policy that set a limit to staff for the scale of donations they could return.

The duty of the Trustees is to work in the best interests of the Charity, and as stated in the guidance "Your starting point should be to accept and keep a donation offered or given to your charity." In other words, the Trustees would normally be expected to prevent as far as possible returning any funds once donated. If the operating company has put in place a blanket rule about returning donations in certain circumstances, I would consider it to the duty of the Charity Trustees to fight that assumption as hard as possible, since returning any funds is directly detrimental to the ability of the charity to carry out its purpose.

The more I think of this, the more I agree with @35B that the critical factor in all this is understanding the responsibility of Charity Trustees around donations; the Gift Aid point then just being an incidental bonus of the fact that you have received a donation.

Tom

 

They could then appoint a Director of Refunds ,Refund Manager and Chief Refund Administrator to process the refunds at a £100k a year combined cost .

 

Glancing quickly at the legislation, I would start with a prior question of interpretation - whether the transaction involved is even a purchase within the meaning of DMCA. For the purpose of a membership of a society, I am far from convinced that the definitions in Clause 254 of the Act capture the transactions involved, while I cannot find mention of "societies" or "charities" anywhere in the legislation.

That suggests to me that great care is required before leaping to the assumption that the sort of transactions we're discussing are in scope of the Act, and therefore whether there is any conflict between DMCA and charity or tax law.

When this discussion started, that would not have been my assumption - but what all good lawyers I've worked with have coached me to do is to walk back to what the drafting is trying to address, and park my own assumptions at the door.

This is something where I very much hope that HRA are looking closely at the detail, given the number of different structures of member organisations, and the potential for it to impact very differently, depending on the precise constitution of the individual organisation.

 

In fairness, having processed Gift Aid, that admin need not be extensive - but it would affect cashflow.

 

I’m getting bored with this gift aided, and think we are going in circles.

ps in my experience in the booking office, yes I have issued refunds in the odd case eg where a service has been full to standing and a pre booked passenger was therefore literally unable to board. However I cannot recollect ever having to refund (or partially refund) a gift aided ticket during the 2023 and 2024 season principally because such passengers were typically more understanding when things went wrong (hence why they were gift aiding in the first place - to support the railway) and were also given an annual pass and therefore could readily make a return visit during the forthcoming 12 month period. So to my mind all this gift aid debate for 2023 and 24 season has been a none debate.

For the 2025 season, I suspect those making the +10% donated fare will be doing so more to support the railway as much as to earn a 15% voucher and therefore when things do go awry they will again the type of person who will be understanding. If necessary I am sure there are ways of compensating people rather than making a monetary transaction.

The only time some one had asked me about compensation for a late train was when I was on a Whitby service I was TTIing this last Christmas; it then turned out that passengers was from abroad in which they would have been unable able to gift aiding in any event and I pointed them in the direction of Customer Services (who could then no doubt point to then to the railways T&Cs).

Overall, I have found that keeping people informed on a late running train had been sufficient to keep people happy and placated. It is all about customer care. Even yesterday, when the 1440 ex Whitby got locked it due to it being late inbound, I didn’t hear any grumbling, with all staff pulling together to minimise personal impact.

 

I understand that there are a lot of charities very concerned about the effect of the Act on their subscriptions incomes

 

All the more reason to get the definitions clear, and particularly to understand which transactions are or are not in scope of the Act. The language and definitions raise significant questions which it would be better to get answered now, than after the cost of a test case.

That's fair - but if charities are handing out money that they are legally forbidden from doing, there are significant implications that go far beyond individual ticket holders being happy or unhappy.

This discussion is being framed in terms of NYMR, but is of much broader interest - some of this has had me thinking hard with a church hat on.

 

Perhaps the time is now right for this part of the discussion to be moved to its own separate thread then? For me, the real concern is how the NYMR is going to fare in the coming season, and the signs don't look promising to me. I have already read, in my LNERCA Newsletter that arrived this morning, that the NYMR have rejected an LNERCA offer of practical help with spares and materials to get the teak carriages back into traffic - with the GNR saloon 3087 added to the mix, including a period of free hire - in order to have them ready for the visit of 60007 but this has been rejected on "budget and risk" grounds. I think that the implication is that the NYMR will be welching on its side of the running agreement for a second year. It doesn't suggest an organisation that is in reasonable financial shape, or even one in moderate shape.

 

Well, they seem to be spending a lot of money on the boiler of 80135.

 

I am not sure if it is helpful, but I was on the fringes of discussions with HMRC whilst a couple of non-railway charities considered what course of action to take regarding GA and donations.

The implications of the conversations, as I remember them (and in layperson's language!), were that the payments made that were eligible must classified and treated by the charity as donations. In return for the donation, any access granted could not exceed the value of the donation plus a set percentage, and was to be treated as a 'complimentary' thank you for the donation.

If this is still correct (the most recent of these discussions was a couple of years ago), then a GA visitor/passenger could not receive a refund of their donation (other than as allowed under charity law), as the travel provided would be a complimentary thank you gift from the NYMR in return for the donation - allowing the donor to see the work of the charity to which they had contributed (and incidentally allowing them to travel on trains in order to do so). This would also resolve the question regarding the right to compensation - as there would be no value attached to providing the travel element of the access to the charity's work.

(Indeed, one of the worked scenarios was where the donation was made but the visitor asked for it to be returned before entering the venue. The answer from the inspector was that this would be down to the charity's donations policy - but that they understood donations to be non-returnable under charity law).

For the NYMR (or any railway or attraction where the operating company is charitably owned) the answer will be in having a clearly drafted Donations Policy that specifies what if offers by way of donor recognition (e.g. complimentary access) and simple Terms and Conditions for admissions (or, in the case of railways, travel) that makes clear the treatment of commercial transactions. The clear and simple interaction between these should clarify the legal distinctions that are embodied in the different regimes (charitable donation and commercial transaction) - but will not resolve the scenario of seemingly similar people seeking refunds being treated differently when they come to the booking office at the end of a delayed journey...

 

Which is much the situation I was suggesting back up thread and very logical. And as there is no consideration for the travel there cannot be a contract either and therefore (at least in my head) for those that do donate the consumer rights legislation does not apply. Which would explain why the apparent conflict wasn’t specifically addressed. (This is not a legal opinion obviously, but it seems pretty logical).

 

I think that money may have come from a bequest.

 

"I’m getting bored with this gift aided, and think we are going in circles."

And probably a lot of people. This is a case of the uninformed, the not very informed and those who say " I am not a lawyer" but then give "learned" opinions...... The NYMR is a very strange organisation.

 

Visited today, starting at Goathland (Bus from York), with 1.5 round trips to Grosmont with the Autocar, followed by the 31 to Whitby. Repton was in steam but 44806 was the steam loco in use. Fairly busy, a annoying 20 minute delay cutting down my time in Whitby to just enough to have a quick cider in the Waiting Room before getting the bus back to York.

 

It’s called a discussion!

 

Indeed, there is no offer, and no consideration.

For a contract to be formed in that situation takes us into the weirder byways of contract law, and things like Deeds - at which point we are WAY beyond the realms of ordinary transactions at a ticket office.

 

Well, well, well, I have just seen a NYMR advert for volunteers on Facebook.

 

You (and a few others) may be getting bored but it is an important discussion about a subject that may have serious consequences for heritage railways and the NYMR in particular. There appears to be a fundamental difference of opinion between @Lineisclear on the one hand and a few others, me included, on the other hand. @Lineisclear appears to be of the opinion that the Consumer Rights Act 2015 takes precedence over the rules about Gift Aid and recompense should be made if the railway fails to deliver its timetabled service. However, under Gift Aid rules these state
"A voluntary donation that allows visitors to view your property will not qualify for Gift Aid if the terms and conditions attached to an admission fee include a right to a full or partial refund of the payment. For example, in the event of bad weather, cancellation of an exhibition or mechanical failure of an exhibit.
This is because under the Gift Aid scheme a donation cannot be repaid under any circumstances."
That to me is quite specific. If you take what the CRA Section 56 says as being paramount, you cannot claim Gift Aid because you cannot comply with Gift Aid rules. However, I and I believe, others are of the opinion that, because the admission fee is a donation, freely given, there is no consideration and no contract. As such the CRA is not relevant. The visitor has no rights and the offer to view the property is a complimentary one as a thank you for the donation. @5914 has joined the discussion and appears to be in agreement with this.
If the NYMR have been giving refunds in contravention of Gift Aid rules it is not beyond the realms of possibility that they could be asked to repay all the Gift Aid claimed, which would be catastrophic for them. I would suggest that complying with Gift Aid rules and ignoring the CRA would be less potentially catastrophic.
As a matter of interest does Section 53 of the CRA not answer the question? It states:
" 53 Relation to other law on contract terms
(1)Nothing in this Chapter affects any enactment or rule of law that imposes a stricter duty on the trader.
(2)This Chapter is subject to any other enactment which defines or restricts the rights, duties or liabilities arising in connection with a service of any description."
My, admittedly amateurish, reading of that clause would suggest that the Gift Aid Rules, being stricter, would take precedence.

Edited because I've just realised I'd left a quote in from a different poster that wasn't relevant to this.

 

It did.

 

It did from a friend of mine.