North Yorkshire Moors Railway General Discussion

So in amongst this mish mash of conflicting legislation around, tax, charity and consumer, where does the legislation around rail passengers rights and obligations sit?
I must admit that apart from the fact the industry seems to totally ignore its existence and the provisions therein, I expected it to not be applicable for heritage lines. However following all the links from the government page on this it takes you to the ORR page on operators to which this applies and that includes the NYMR who of course are a TOC.

 

Strictly speaking the NYMR is an Open Access Operator so not subject to the delay/repay regimes established for the main TOC's . However, it's Licence to operate between Grosmont and Whitby includes a condition in respect of compensation and refunds. My reading of that is it's just recognition of the application of the 2015 Consumer Rights Act under which the NYMR is is no different position to any other heritage railway offering a service regardless or whether or not it operates over the national network.

 

I thought that we’d just gone through all this and established that Gift aided ‘ticket’ is a donation pure and simple and there is no contract to provide anything and no refund possible under Gift Aid rules. That makes it fundamentally different from most other heritage railways.

Edited to correct typos.

 

Not sure the 2015 act specifies the provision of food and drink (or vouchers for) on delays of over 60 minutes does it? I accept that due to the shortness of the line and the lack of through booking onto the National Network, the overnight hotel provision is not relevant.

 

Although there is a lot of legislation, I think the heirarchy is clear. The Gift Aid regulations set out unambiguously that GA can’t be claimed if the attached terms and conditions offer any right to a full or partial refund. And the Consumer Rights Act states that where there is a conflict with a stricter duty on the trader, the stricter duty takes precedence.

That seems pretty unambiguous to me - you can’t offer any form of refund in your Ts&Cs and also claim Gift Aid. It’s one or the other.

Tom

 

I think it is more than this, Tom. The Gift Aid rules are written in simple English that anyone can understand and it is clear that, once the donation is accepted, that cannot be changed, whether gift aid is claimed or not so you cannot change the status of the payment to suit the circumstances. The T & C need to reflect that fact.

 

The relevant Gift Aid law is the Income Tax Act 2007 which HMRC rules try to reflect but can't change. Everyone has focussed on the position of the railway as recipient of Gift Aid but the law is couched in terms of the the tax relief a Gift Aid donation generates for the donating taxpayer. If that isn't claimed because the donor elects to pursue a claim for compensation or refund knowing that the transaction will be treated as a purchase at the same price ( the availability of which option is one of the conditions) then both statutes are complied with.

 

I really struggle with the concept that the money handed over in order to ride on a train has the potential to be either a transaction or a donation, but remains in limbo until the end of the day when it's seen whether there was any late running or not. I do hope that bit specifically has been run past some very senior independent advisors. I'm quite pleased that thus far in my short tenure as a trustee, I've tended to find that if something doesn't feel right, I have usually been able to confirm that fact by finding some suitable charity commission guidance to support my gut feeling. On this occasion I've found:

Terms and conditions
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.
- Gift Aid donation claims for charities and CASCs - GOV.UK

This seems quite clear to me - you can't pick and choose which payments are donations and which are not, it's decided at the point that payments have T&Cs attached that may result in refund. Whether that refund happens or not is irrelevant, it's attaching the T&Cs to it that matter.

 

The 2007 Act is quite clear. The election to claim tax relief by making a Gift Aid declaration is in resepect of the RIGHT to view the charity property. If there's a right there will also be a corrresponding obligation to allow person making the payment in for that purpose. It's also stipulated that the same right must be available at the same price and impliedly on the same conditions without opting to claim Gift Aid relief. All the essentials of a contract to provide a service are present. If the benefit to the taxpayer is not claimed because he or she has opted to rescind the Gift Aid declaration and accept compensation then Gift Aid is not beeing claimed in breach of the conditions and the taxpayer is, as the law requires, being treated fairly in the same way as a purchaser who elects not to clalim the tax benefit.

 

I suspect most on here can see why the NYMR is in such a financial mess …

 

Someone is having their cake and eating it.
At the point the donation is made, should it not be made clear that by donating, the donor waives all right to a refund in the event of late running etc.?

 

The NYMR does appear to be literally the only organisation I can find that has come to that conclusion, given the unequivocal guidance around Gift Aid, and the restrictions on charities refunding donations. Which as a general stance is one that I would consider - courageous.

Tom

 

We come back to a question of definition, and whether the payment is or is not a donation. My view is that this precedes the question of tax, and is a fundamental question of classification. To be eligible for Gift Aid, the payment is a donation. That status is governed by charity law, and that precludes repayment.

That in its turn means that the 2015 Act is not engaged, no matter how much the transaction looks like a consumer transaction.

Unless there is explicit legal advice to the contrary, or precedent setting case law through the courts, I cannot see how the circle can be squared with the law as it is.

And, yes, that does mean that the law is in this case an ass.

 

The logic is that the transaction is payment pursuant to a contract for a service which is deemed for tax purposes to be a donation.

 

The logic is understood, and not in itself unreasonable. The problem is that, unless there is something clear that contradicts it, the "deeming" a payment to be a donation is not just an accounting sleight of hand, but an absolute fact - and is crystallised at the point that payment is made, not some later point.

As my first year university political philosophy course taught, to get to the right conclusion you must have both right premise and right reason. In this instance, the issue is not the reasoning but the premise, and I am firmly with @Jamessquared in considering that the bare fact that NYMR is, as far as I am aware, unique in it's approach is itself a very strong indication of how weak that position is.

Conan Doyle wrote of the dog that didn't bark. In this instance, the deafening silence is found on the questions of binding precedent, explicit advice on the interaction of these fields of law, and published HMRC or Charity Commission guidance on the enforcement of tax and charity law for charities that opt for a policy like that of NYMR.

As a wider question of policy, I also regard this as a really bad battle to fight. It is high stakes for the charity concerned, and any outcome risks killing the golden goose that is Gift Aid on charity admissions for not just the charity that fights the case, but the whole sector.

 

You’ve suggested in the past, if I remember correctly, looking at the purpose and intent of legislation. In the case of the 2007 Income Tax Act it isn’t to hobble charities with restrictions but to ensure that a taxpayer seeking to benefit from tax relief doesn’t get back part or all of money paid on which that relief is claimed. If the Gift Aid recovery claim is not made in respect of that payment then there’s no tax benefit for the individual. By ensuring that payment of compensation or a refund involves rescission of the Gift Aid declaration the purpose and intent of the 2007 Act’s provisions are achieved.

 

I’m a chap with a simple mind and the Government has written various rules regarding Gift Aid in a way that I can understand rather than me looking and understanding the 2007 Income Tax Act. I’m fairly certain that, in doing so, they will have involved their legal eagles. The impression that I’m getting is that you are saying that they are wrong. Having known Geoffrey Claydon, who was a Government legal eagle, I have been mightily impressed with his ability to understand and interpret Acts of Parliament which they had drafted. I’m sure he was not unique in this respect. If I was a betting man, I’d bet a Mars Bar that the government's legal eagles were right and @Lineisclear is wrong However, I’m not a betting man.

Edited to correct an error by me.

 

That's fair, but omits the parallel question of the restrictions imposed by charity law on the treatment of donations. While I can see and am to some extent sympathetic to the argument you're advancing, it relies on not just a very specific interpretation of tax law that is not being used by other charities, but also on discounting the basic point that a donation is, well, a donation - and not some kind of quantum transaction, possibly a purchase and possibly a donation depending on who is asking and when.

 

No, I'm saying that the drafting of the 2015 Consumer Rights Act was quite specific, and did not carve out these transactions from the general rules on Gift Aid. I operate the Gift Aid rules for my church, and they are generally straightforward and clear - and leave no room for ambiguity.

As an aside, while I have the greatest of respect for Parliamentary draftsmen, I have rather less for the quality of brief that they are given, or for the scrutiny that Parliament gives that legislation. I therefore find it entirely plausible that anomalies like this exist, and that the various sections of law need to be checked with very great care.

That is why I am deeply uncomfortable with the argument that @Lineisclear makes, not because I think it inherently bad, but because it is too simplistic and does not resolve clearly identifiable anomalies but seeks to set them aside. As Sir Humphrey would have said, that is a brave position to adopt.

 

Apologies, 35B. I’ve picked up on the wrong post. The ‘you’ I was referring to was @Lineisclear and not you. I’ll edit my post accordingly.