North Yorkshire Moors Railway General Discussion

The NYMR used to make provision for future overhauls via its "deferred maintenance fund! but it would seem that it was just an accountancy ploy, because it only ever contained a nominal sum, which turned out to not be there whenever it was needed. In a nutshell, it has long been the NYMR's practice to run its locos into the ground and then park them until it gets so desperate that it feels it can launch an emergency appeal. Think of 80135, 75029 and 372 as examples. It seems to be only the owners of on-hire locos who can meet overhaul costs, because they have to be paid their hire fees, even if they are inadequate and have to be subsidised by their owner - but of course, the likes of @Lineisclear think that is perfectly acceptable, as the railway is providing them with somewhere to use their locos.

 

Pranging half of your operational rolling stock a couple of weeks before a gala, for example.

 

37264 vice 34072 today on the whole diagram, according to the loco roster.

 

One would expect a heritage line to capitalise the external costs of an overhaul and depreciate it over the expected life to the next overhaul, however you would not expect actual cash to be put to oneside for 25 odd years.

A slightly different approach might be adopted for an organisation that owns one loco that generates steaming fees where cash would be reatained.

 

34072 failed FTR. Weeping fusible plug this morning whilst still at New Bridge.

 

It is rostered for tomorrow.

 

A problem with relying on depreciation in this situation is that depreciation's only potency in actually helping to provide cash for asset renewal is in reducing distributable profits (thereby restricting dividends), which obviously does not work for a loss-making non-profit company. Creating an actual cash pot for every asset or group of assets (cash pots are I assume created for earmarked projects backed up by "restricted fund" concepts for charities) would be cumbersome, and as cash is fungible, the temptation to dip into an earmarked but unrestricted pot would be irresistible, understandably if the choice is between that and not paying wages say.

On this subject, one inevitably comes back to how unhelpful the published accounts are to analyse the financial performance of the NYMR group. One hopes that board members actually get to see meaningful reports. The PLC has no fixed assets and not surprisingly "depreciation" is not mentioned in their accounts. The Trust has lots of fixed assets but presumably not much commercial revenue (it is not clear what commercial revenue it receives directly) and one has to assume that it gets paid an annual seven figure sum by PLC for using the Trust's assets. The Trust set aside £646,000 for depreciation in the latest year which would create a similar loss in the Trust if there was no revenue to offset it.

 

Trust accounts are caught by having to comply with charity commission rules. These create accounts (goodness knows why) that are to my mind almost notorious for being useless.

 

From a church chair of finance, no "almost" - they absolutely are notorious for being nigh on impossible to interpret, even by trained professionals. Somehow I doubt that the new Charities SORP will improve the situation much.

Would you? If the asset is a heritage asset, held for the purposes of heritage, and the organisation is a loss-making non profit company, do you depreciate. In a church context (also an organisation with a heavy reliance on donations and appeals), the costs of things like roof repairs don't tend to be capitalised because the accounting treatment distracts from more basic questions of whether there's money in the bank - or not.

 

I assume you mean charity rather than trust accounts, as genuine trusts (which can be capitalist red in tooth and claw) are rather different animals. The issue here though is exacerbated by the PLC, as there is no clear information presented on what the relationship is between the two bodies. I think the PLC is now the contracting party when you buy a ticket but that was not clear for many years (and indeed this might have changed over time) and the "group" still uses "North Yorkshire Moors Railway" in its material rather than identify a company (it is I think a trade mark of the PLC) . Also I doubt there are rules preventing a charity from making available a more helpful report on its finances in addition to the statutory ones.

 

I hope the PLC is not the contracting party when purchasing a ticket, as I suspect HM Inspector of Taxes might need a word due to the Gift Aid arrangements. More generally, this charity Trustee's experience is that Treasurers have more than enough work to do in order to get statutory accounts sorted, and that reporting material comes a distant second.

 

Trust as in North Yorkshire Moors Railway Trust. Since that was the organisation being discussed.

 

While I am postulating certain things about the NYMR set up, the PLC not being a charity would not necessarily be fatal to gift aid. The Talyllyn I think pioneered gift aid on tickets and the operating company (the statutory company of 1865) is not a charity. The scheme was I assume approved by the Revenue as the statutory company is wholly owned by a charity, Talyllyn Holdings Ltd. I think the NYMR Trust holds all the voting shares of NYMR PLC.

 

The ticket purchase must become a donation to qualify for gift aid. Only charities can claim gift aid. The donation has to be to a charity to qualify for gift aid. That’s the rules.

There are several structures that can achieve the above and provide the donor with a train ride or more accurately with access to the charitable activities to view them.

In both the examples you quote there are slightly different methods of achieving the above. That is the donor makes a donation and as a thank you gains access. But, in every case the donation is made to a charity.

 

You prompted me to check. The Fares page on the Talyllyn website explicitly states "*Talyllyn Holdings Ltd, Registered Charity No: 1089053"

 

https://www.talyllyn.co.uk/legal/terms might be a better guide. I am not sure the TRCo's accounts are available on line, just the consolidated accounts of Talyllyn Holdings. The TRCo's accounts however are published to the members.

 

It’s an understandable red herring. The PLC in which the Charity owns all the voting shares sells the tickets but is recognized by HMRC as having charitable status.

 

If you didn't want to be in breach of the international accounting standards, then yes you should. Repairs to tariff would to my mind be on going opex, unless you stripped the roof and effectively replaced it.