West Somerset Railway General Discussion

Two major sources of WSR pax revenue are coach parties and annual passes ( currently
£130 p.a. A Bishops Lydeard Minehead return ticket is £33) .

Additionally the WSR does have a reasonable amount of intermediate station traffic
and as Tom says, there would be potential complication for ticket offices. As a
former TTI I see it as one more complication. I am not saying no, but the regular
NP posters who offer it as a financial panacea need to stop and think.

However I have in the past ( and still do ) favoured an overarching charity for the WSR with
the Plc as it’s operator . In the case of the WSR because the existing WSR Plc, WSRA
and the Heritage trust situation is cumbersome and relies on people always relating
to each other. Past history is not encouraging and the arrangement has not brought
to the WSR the level of donations, legacies etc apparent on some other Heritage
Railways

Michael Rowe

 

And that may be an issue for those lines that sell an annual pass.
I forget what the WSR one costs over £100 now I think, Swanage £149, but one return trip looks a bargain to get all year travel. Of course if not many annual passes are sold may not be an issue.

 

Most of what you've said is spot on, Tom. With regard to VAT, I don't think there is a connect between that and gift aid and that zero rating and gift aid can co-exist. This has obviously been discussed with HMRC and they have agreed on that fact. The NYMR is certainly not the only railway doing this.
Coming back to your points, there is the important fact that you have to offer the ticket for all but five days/year. This means special events if you exceed this number of days so you have to choose carefully which days you use the five on. The NYMR has given up on its wartime weekend but it would have been a difficult choice on whether to go for this or the steam gala and I'm sure that there are many railways where it would be a difficult choice. I also think that Santa specials would fall foul if they ran the whole length of the railway. On the NYMR they escape because they don't and it is a fundamental that a gift aided ticket does that.
As said no one size fits all. Personally, I don't think it is the cash cow that it is being made up to be.

 

The annual pass is another consideration, as is anyone who might travel twice or more during a year and pay the full fare. You have immediately reduced your income from those people as they will not be paying out as much. One lost additional ticket from someone is effectively the equivalent of four gift aided fares in terms of cash income.

 

Especially after attending a half day session considering church giving, I'm tempted to think that the structural issues are secondary to the personal and behavioural when it comes to attracting donations. As someone who considers himself experienced in this area, I found today an interesting reset.

 

The annual ticket is another interesting nuance - you run the risk that you convert a ticket for which some people are currently prepared to pay £130 into one offering basically the same amenity value for £33, just in exchange for £8 in Gift Aid ...

My hunch is that this whole area is a lot more finely balanced than is often presented, and you have got to have a lot of confidence in your cost models. @Steve point about having only five operating days not in scope is also important if you are in the realms of being railway that offers multiple galas, or if your galas are a disproportionately important part of your overall financial picture: you might have to start making difficult choices about cutting or reducing in scope a well-patronised event to preserve a Gift Aid concession for the rest of the year.

Tom

 

Probably, if you include the pennies.

 

Gift Aid isn’t an exclusive benefit to Heritage Railway Charities.
I visited the Royal Yacht Britannia a few years ago, our group did not have pre-booked tickets. The queue for the ticket office was lengthy but moved steadily.
When paying, we were asked “are you a UK taxpayer, would you like to gift aid your ticket cost?” Answering “yes”, we were each given a 1/3rd A4 slip; “name, house number and postcode, tick the box for UK taxpayer, sign at the bottom”.
It took me longer to type it, than do it.
I’d imagine the majority of RYB tickets are now sold online, where there is less time pressure to get a gift aid declaration.

As for whether a train ride from somewhere to somewhere is suitable for gift aid, if one of the charitable aims of your charity is to provide a heritage train service between somewhere and somewhere; then gift aid must be appropriate.
I’d imagine that all heritage railways which are registered charities, have a charitable aim to run a heritage railway.

 

You don't have to offer a full year of travel. The Talyllyn simply gives you a drinks voucher which theoretically is worth more than the donation element.
https://www.talyllyn.co.uk/plan/fares/

 

I am sure the last time I went to Didcot I was asked to gift aid the admission, but do not remember being offered any benefit to me for doing so. Is that because it does not go anywhere, not that other non railway fixed attractions that offer a year or multiple entries for gift aid do either). Mind you back before Covid so the memory may be dodgy.

 

At non-railway attractions, I've seen two general schemes:

• The Gift Aid price is a premium over the normal price (typically about 10%). Gift Aid can be reclaimed on the whole amount, and typically the premium is redeemable in shop or cafe; entry just covers the one day. The Weald and Downland Museum offer that scheme, which seems to be the substantively the same as the Talyllyn.
• The Gift Aid price is the same as normal; Gift Aid recoverable on the whole amount, and price gives you free entry for a year. The Fleet Air Arm museum give that scheme, which seems to be substantively similar to what the NYMR are doing.

All of which seems to show that deciding on an implementation for a given attraction is far from straightforward. In the NYMR case, it would be very interesting to know whether they have robust evidence that the amount collected in Gift Aid exceeds the amount essentially cannibalised by repeat visitors who may otherwise have bought a 2nd, 3rd, 4th ... ticket during the year. the Tal-y-llyn scheme feels a safer bet, but you have to incentivise someone who could visit for £25.40 that actually they'd really like to pay you £28 instead.

Tom

 

Very easy for higher rate taxpayers; the premium is more than returned through the tax return.

 

I'm open to correction on this as I'm no tax expert but I believe that, if you give a voucher that is redeemable in the shop, that introduces an element of vat on the notional value of the voucher so it gets even more complicated. It is certainly the case where a charge for car parking can be offset against the cost of a train ticket.

 

The fact that it does not go anywhere will only affect vat liability. With regard to gift aid, there are two possibilities. One is that you get a years pass for a standard entrance fee. The other is that you pay a higher admission price against the standard admission price. There should be a notice telling you that but it may not be easy to spot, although it should be. If you are unaware of the admission price and when asking for tickets, the person asks you if you want to gift aid and you say yes, he will automatically quote you the higher price. Job done, although he should have offered you the choice of ticket.

 

One of the many benefits of a gift aid / repeat visit deal is that pax will travel more often. Those extra visits are on the basis of having a "freebie" but as they would not have otherwise travelled, there is no loss of ticket revenue. The win is found in a) other pax such as friends and family will travel with them and buy a ticket, and b) you get additional discretionary spend on food, drink, gift shop etc. The Trust / plc thought the charitable status plan was a bad idea so the rest is history.

The accounts will be available on or before October 20th.

WEST SOMERSET RAILWAY PUBLIC LIMITED COMPANY filing history - Find and update company information - GOV.UK (company-information.service.gov.uk)

 

All supposition and probably nullified by those who would pay to travel twice (or more) and wouldn’t have to pay. It’s a ratio of 4 to 1.

 

The Talyllyn scheme has been running longer than most although they do not seem to break out the actual contribution of gift aid in the latest accounts. My impression is that it is worthwhile but of course one does not know if other approaches would yield more The TR has struggled with free fares for many years because membership gives you that (and on the Ffestiniog although the FR brought in restrictions a long time ago) but I think this benefit may have been watered down on the TR now) so traditionally visitors to the area could sign up and use the train as many times as they liked. The TR's accounts remain dreadful, the railway including shop and catering losing £174,000 in 2023 after including £217,000 of grant income i.e. a loss of £400,000 before that (cf. fare revenue of £756,000) (grants are not explained but some of this has traditionally been the charity funding certain paid-for positions). The Treasurer reports that the deficit is likely to be bigger in 2024. Paradoxically, the cash balances remain at record high seven figure sums.

 

The TR & NYMR schemes have common denominators in Garry Mumford (finance) and Chris Price (General Manager) who are/were involved with both. They are the ones who have pushed them. Like you have said with the TR, as far as I can see, the NYMR accounts don't detail gift aid on tickets so a true insight cannot be formed. I still remain to be convinced that they are the cash cow they are made out to be.

 

The question for me is not "how much Gift Aid have we received" but "what is the effective price paid per seat".

 

Something that, as someone with only a basic understanding of accounts , has always puzzled me is how a heritage railway can remain in business when it is is posting heavy losses year after year? Whatever the formal accounts report , the cashflow must be enough to keep going. I'm sure one of the financial gurus on this forum can explain this conundrum.