North Yorkshire Moors Railway General Discussion

At which point the potential passenger has decided get stuffed I’ll drive to Whitby and pay £5 to park and save £49.50 each ….
Crazy …trying to extract as much money by greed and failing miserably (to extract money and as a business ) as a result .

 

That's how it's worked at other attractions using a Gift Aid model, where I've visited with friends. It's absolutely all about who makes the payment, not the make-up of the group

 

If I pay for myself and a friend, and the friend then pays me, then strictly I have only paid for myself. However I can't see HMRC bothering to investigate a few pounds going to and fro between friends.

 

Indeed. They won't, and as the declaration is about the payment to the charity, they've no real interest in it. And as in the majority of cases, this will be a cash transfer between two taxpayers, they'll be losing nothing as a result either.

 

The problem with that is that fare income is really offset against the largely fixed cost of running the railway. Secondary spend only provides a profit margin as the railway has to buy the goods in. Ive no idea of the NYMRs manning situation these days but if its paid staff on the trolley/ buffet car your bottle of water is probably only contributing (not many) pennies to the bottom line ditto almost every secondary spend item. Any extra fare income is almost 100% going to the bottom line.

 

I think it will depend what the item is. Usually "ready made" items are bought in and the return on them relies more on volume of sales because the margins are low, but "home made" stuff usually has a much better margin, provided it is not associated with waste in the preparation and storage processes. Cups of ta and coffee, and plates of chips, are far more lucrative than bars of chocolate or packets of crisps!

 

All true, but none of which alter the brute reality that secondary spend does not contribute anything like as much as the same sum of money spent on fares to the bottom line costs of running the railway.

If I spend £10 in the shop, there may be a couple of quid left over to go into general funds when margins on stock and shop overheads are considered. If I spend the same £10 on a fare, it all goes into general funds to offset the cost of running that train. And if I donate that money, it's free cash.

As visitors, we tend to think "oh, it all goes to the same place". If we're trying to benefit the railway, then we need to think more broadly - and acknowledge that this must play a role in fare setting.

 

Chips chocolate and crisps all a bit 60's spotter is it not. I thought the market had moved on.

 

I know all of that, I think what I was really trying to convey is that secondary spend is at best a relatively minor consideration, depending where it comes from, and just like the trains (indeed more so) it needs to be carefully managed to ensure that it pays its way and does not become a drain on resources. Trust me, it's a lesson I have learned the hard way elsewhere!

 

I agree, it's a fiendishly difficult thing to work out. The direct costs of selling drinks and snacks are easy to work out. For example, 30p to buy a bottle of water, sell it for £2. Coffee, 80p for beans, milk and cup, sell for £3.50. Staff are already employed whether I travel or not, so upselling everything else needs to be promoted to cover those costs as well. Yes, it's difficult to separate it all, but running a shop and cafe should be essential to the day to day running of the railway, in the same way as maintaining rolling stock and track.

As I said, paying £70 in one hit for tickets wouldn't have been appreciated by the missus, though the railway would've had all that money. £30 to go to Goathland and back was an option, but the railway wouldn't have seen any extra cash due to the shortness of the journey. Instead, we've handed over about £80 over the course of the day, and the railway could bank about £55 of that after covering the costs of drinks and snacks.

I admit, it's very tough to gauge it - price it too high and people won't travel, too low and you run the risk of not covering your costs. The NYMR have flipped from too low to too high too quickly. £50 for an annual pass one year to the same price for a single day the next is incredibly ill thought out.

Fixed costs stay the same whether people travel or not. Shops and cafes still need staff, electricity, water, insurance, cleaning, maintenence, etc. whether anyone buys anything.

 

I'm no expert, either but before posting I had a look at:
https://www.gov.uk/government/publi...a-right-of-free-admission-to-charity-property

It says:
3.39.4 For the benefit of any right of admission received in consequence of a donation to be disregarded (so that the donation can be considered for Gift Aid), either of the following conditions must be satisfied:

• a donation is made and in return the charity grants a right of admission to the donor, or the donor and his family, for a period of at least a year, at the same times at which the general public can obtain admission
• a donation is made of at least 10% more than the cost of admission to the general public and in return the charity grants an equivalent right of admission to the donor, or the donor and their family

(My emphasis in bold)

My interpretation of this is that you cannot buy for other people and claim gift aid back because that other person may not be a tax payer. Happy to be told that's wrong, though.

 

I think that's an unduly restrictive reading. The right goes to the donor (and by implication, their family) - not those who may have been part of their admission. It doesn't seek to enquire who belong to the group.

What it does mean is that, if a group consists of two families and both families want to receive benefits, they need to book separately.

 

I think that secondary sales items have to be regarded as providing part of the service and crisps, chocolate bars and chips, whilst they might be a bit outdated, are still favourites with kids, who probably don't want smashed avocado or Quorn bolognaise etc. Besides, we're talking about heritage railways here, sixties tastes (whilst at bit too recent for the image, really) are quite in keeping with MK 1s and BR painted locos! I'm not sure that nostaligia would extend to dried out cheese sandwiches, though!

 

In practice a very wide interpretation of family is applied. The donor gets the benefit of the right of admission and can assign that right to their family members. If you bought for a friend, you could still be granted the benefit and they can enter with you, but you can’t assign the right to them, in other words they cannot enter without you, but you can’t assign the enter without them.

 

I would agree otherwise what stops you asking, especially on last years deal, if anyone who is a non taxpayer wants to join your group and get a years travel?

 

It’s the donor that obtains the benefit of entry.

 

As far as HMRC is concerned the payment/donation is from an individual and, whether they are buying one ticket or several, as long as they have paid enough tax to cover the tax the charity claims then it's a valid Gift Aid claim. Admittedly it becomes woolly around who is receiving the benefit of that donation but given the make up of 'families' in 2025 that would be a can of worms that no-one wants to open.

Good luck to the Government Department (or anyone else) that decides to start rewriting legislation to define what a 'family' consists of in 2025...

 

Well they are wanting a retro experience!

I've yet to see smashed avocado on toast and iced Macha in a preserved railway tea room.

 

So last year if 5 travelled only one of them got return trips free?

 

At other places at least (I don't know what the NYMR did last year) it essentially depends on what type of ticket you are buying. I think the confusion is that ultimately only one person is doing the actual paying, so they are the person who is deemed to be making a donation (and who therefore must have paid at least as much tax in the year as the amount of Gift Aid the charity wishes to reclaim). But the charity can still have multi-person tickets, typically a family ticket.

To take a concrete example, I can buy a one-year Ticket at Portsmouth Historic Dockyard, which is £43 for me or £115 for a family. The charity can reclaim Gift Aid (if I sign the declaration). If I buy the £43 ticket, only I can return through the year. If I buy the £115 ticket, myself and family can return, in any combination. (Defined as up to 2 adults and up to 3 children, in their terms).

If two or more adults turned up, not related by family, then they would need separate adult tickets. However, the opportunity to buy a ticket has to be available to a non-Gift Aiding customer on the same terms as someone paying Gift Aid. Given that, I believe that in the hypothetical situation of two un-related adults wishing to travel and have the whole year concession, any combination of one adult paying for both tickets with or without Gift Aid declaration; or both adults paying separately, with or without GA, would be possible. The only criterion I can see is that whoever does the paying has to have paid sufficient tax in the year if they wish the charity to reclaim the Gift Aid.

Portsmouth Historic Dockyard is quite clear in the way it sets it out: essentially all ticket types (adults, children, families etc) are available with or without adding Gift Aid, which satisfies the requirement that any offer made to Gift-Aid paying passengers also has to be available to those not paying. The one additional condition of being a Gift Aid donor, outlined in their terms and conditions, is explicitly "Tickets to which Gift Aid is added are subject to Her Majesty’s Revenue and Customs (HMRC) regulations and are therefore not eligible for a refund." No ifs, no buts on that one ...

Tom