The proposals, benefits, drawbacks etc.

[Barry Flood]

May I attempt a little clarification about the "25%" issue?

The references are presumably to the Save the CTC web site where there is an extraordinary section about the “25% rule”. The 25% referred to is a calculation of how much Gift Aid we can claim on your membership fee. This is solely a tax rule which calculates how much of the membership fee is personal benefit and how much tax relief we can claim.
As most of your fee helps you and others go cycling (an allowable charitable activity) and individual items like the magazine are excluded under the rules this should not affect CTC materially.
However Save the CTC goes on to make the erroneous claim that “This means that only £9 of the current £36 adult member fee – or even less if you pay a lower fee – could be spent on you.”
No it doesn’t. This shows a fundamental misunderstanding of tax law as it affects charities. There is no value set on benefits in Charity Law; this is purely a tax calculation, and therefore imposes no limit on the amount of their subscriptions that can be spent on members.
I might add that I was a tax professional.

Barry Flood
CTC Councillor

[Jonty]

Barry - thanks for that clarification. So am I correct in thinking that on average for an adult member the CTC could claim an additional £9 from the Inland Revenue for every £36 received by way of suscriptions if it became a charity, and no limit is required to be set on the amount of money allocated to member- benefits, that is, in the above case it would be possible to allocate a full £45 per adult member to member-benefits if it were so decided, once the CTC became a charity?
Am I correct in thinking therefore that potentially member-benefits could increase if the CTC became a charity because of favourable taxation arrangements?
jonty
PS
It might be useful for the CTC to issue a question and answer routine listing and answering the several key questions which are exercising members' minds in order to assist members in coming to an informed and considered decision on which way to vote. Apologies if this has already been done.

[Regulator]

May I attempt a little clarification about the "25%" issue?

The references are presumably to the Save the CTC web site where there is an extraordinary section about the “25% rule”. The 25% referred to is a calculation of how much Gift Aid we can claim on your membership fee. This is solely a tax rule which calculates how much of the membership fee is personal benefit and how much tax relief we can claim.
As most of your fee helps you and others go cycling (an allowable charitable activity) and individual items like the magazine are excluded under the rules this should not affect CTC materially.
However Save the CTC goes on to make the erroneous claim that “This means that only £9 of the current £36 adult member fee – or even less if you pay a lower fee – could be spent on you.”
No it doesn’t. This shows a fundamental misunderstanding of tax law as it affects charities. There is no value set on benefits in Charity Law; this is purely a tax calculation, and therefore imposes no limit on the amount of their subscriptions that can be spent on members.
I might add that I was a tax professional.

Barry Flood
CTC Councillor

Barry

Perhaps you'd like to put that quote from the Save the CTC in context. It's in an article about the tax implications of the proposed changes and, in particular, about the Gift Aid potential - something that Council and National Office were pushing heavily.

It is preceded by the following words:

"The 25% Rule means that, if the CTC becomes a unified charity, the CTC will be able to provide you with member benefits totalling only 25% of your membership fee if it wants to reap the tax benefits of charitable status. Any more than that and it won't be able to claim Gift Aid."

I should also point out that there is no certainty that "...individual items like the magazine are excluded under the rules this should not affect CTC materially." As you know, HM Revenue & Customs will not enter negotiations on or confirm such matters until the CTC has become a charity.

Regards

Greg Price
CTC Councillor.

[Barry Flood]

Regulator

Greg

Judging from the number of contributors to this forum who have picked up the identical wrong impression from the Save the CTC website that the 25% rule somehow restricts the amount of their subscriptions that can be spent on them as members, I think that the wording, put there either deliberately to advance a particular viewpoint, or simply inadvertently, needs to be changed at once so it causes no more misunderstandings on this topic.
I’m sure you would agree that truth and precision are essential in what we show to our members.
Regards
Barry

[Simon L6]

If that's the case, Barry, would you like to explain why the Trust needs a bridging loan from the Club? And is a bridge with one end in space really a bridge? And is the Trust staring down a black hole labelled 'Cycling England was here'?

If memory serves the Trust owes the Club getting on for £400,000. If this rises to over £600,000 could the debt be converted to a share of the premises that the Club gave to the Trust?

And, in the mean time, could you tell me who at National Office is responsible for liaison with and assistance of member groups? And how many hours she is scheduled to work with member groups each week? Because, never mind the Romans and the Victorians, I'm not sure what CTC HQ is doing for us. And, could you also tell me why the insurance fact sheet for rides leaders now makes 5x5 a rule? Because I'd like to continue running the FNRttC as a CTC ride, and right now, that's not possible. And would you consider that losing one RtR liaison staffer would be accounted a misfortune, but losing two looks like carelessness?

The point I'm making is the same one that I made a year ago. Before setting off for the stars it's as well to check the kitchen cupboard is well stocked.

[Regulator]

Regulator

Greg

Judging from the number of contributors to this forum who have picked up the identical wrong impression from the Save the CTC website that the 25% rule somehow restricts the amount of their subscriptions that can be spent on them as members, I think that the wording, put there either deliberately to advance a particular viewpoint, or simply inadvertently, needs to be changed at once so it causes no more misunderstandings on this topic.
I’m sure you would agree that truth and precision are essential in what we show to our members.
Regards
Barry

Hi Barry

I don't think that many people are being 'misled' by what is on the Save the CTC wev-site. The Save the CTC web-site includes the guidance on the matter from HMRC. I think most people understand the issue perfectly well.

As for 'truth and precision' I'm all for it. It normally comes from there being an open and frank debate... which is why I am so concerned that Council and National Office seem to be do everything possible to stifle any debate.

Regards

Greg

[Jonty]

I'm confused because I'm receiving contrary opinions on this matter.
Surely whether or not the CTC is restricted to only allocating 25% of members contributions towards member benefits if it were to become a charity, and whether or not it could increase the amount of money spent on member benefits to 125% of total member contributions if it were to become a charity, are matters of FACT not OPINION.

Members need clear advice on this and other matters from an independent professional expert before we can possible make an intelligent decision on this matter.
jonty

[Simon L6]

I've re-read Barry's post and realises that it says everything and nothing.

Surely the entire point of becoming a charity is to scoop some kind of tax break? That's the way it was sold to me by Peter Jackson and Kevin.

All of this fades in to the background when we consider the reduction in funding for cycling, and the concomitant reduction in 'charitable' income. Whatever the merits of the projects that the CTC has received funding for there's going to be a lot less money next year than this. As those of us who opposed the conversion pointed out time and time again.

What provision has the Trust made for redundancies?

Has the CTC Trust identified reliable sources for future match funding?

[Yorkshireman]

I'm confused because I'm receiving contrary opinions on this matter.
Surely whether or not the CTC is restricted to only allocating 25% of members contributions towards member benefits if it were to become a charity, and whether or not it could increase the amount of money spent on member benefits to 125% of total member contributions if it were to become a charity, are matters of FACT not OPINION.

Members need clear advice on this and other matters from an independent professional expert before we can possible make an intelligent decision on this matter.
jonty

Now there's a 'Good Idea' (as long as members get an unedited report from the independant expert)

[Simon L6]

Now there's a 'Good Idea' (as long as members get an unedited report from the independant expert)

oooch!!!!!!!

[Regulator]

I'm confused because I'm receiving contrary opinions on this matter.
Surely whether or not the CTC is restricted to only allocating 25% of members contributions towards member benefits if it were to become a charity, and whether or not it could increase the amount of money spent on member benefits to 125% of total member contributions if it were to become a charity, are matters of FACT not OPINION.

Members need clear advice on this and other matters from an independent professional expert before we can possible make an intelligent decision on this matter.
jonty

Hi Jonty

If CTC were a charity, and it wanted to claim Gift Aid on members' subscriptions, the maximum amount of the subscription which could be used to provide personal benefits to that member is 25%.

The amount of Gift Aid that CTC would receive would depend on what sort of tax the member pays (e.g. basic or higher rate) or whether they are taxpayers at all (don't forget that a significant proportion of CTC members are not taxpayers). A variety of figures has been bandied around - but it is not possible to say with any certainty what the total benefit of Gift Aid would be to CTC until such time as it becomes a charity and negotiations with HMRC are undertaken.

Hope this helps....

[Si]

I'm confused because I'm receiving contrary opinions on this matter.
Surely whether or not the CTC is restricted to only allocating 25% of members contributions towards member benefits if it were to become a charity, and whether or not it could increase the amount of money spent on member benefits to 125% of total member contributions if it were to become a charity, are matters of FACT not OPINION.

Members need clear advice on this and other matters from an independent professional expert before we can possible make an intelligent decision on this matter.
jonty

Now there's a 'Good Idea' (as long as members get an unedited report from the independant expert)

<removed comment - probably a misunderstanding>

2/ in answer to Jonty, the problem is that the issue is so complex that even finding an expert opinion is going to be difficult, let alone a truly independent one. For instance Regulator is an expert in aspects of charities and Barry is an expert in aspects of tax - yet they disagree strongly on what the best course of action is to follow. Indeed, as soon as an independent voice puts their support behind one side or an other, the other side will claim them to be no longer independent. So, what are we, the humble rank and file membership to do? there are only two things that I can suggest: 1/ read through all of the literature on the whole of the debate and, assume the vote isn't over by the time that you have finished, try to make your own mind up as best you can. 2/ because the proposition can be resubmitted if not passed, the safe way to vote for those that can't make up their minds is against the charity merger, because then they have the option of changing their minds in the future, unlike if the merger resolution is passed.

[Simon L6]

I think, Si, a valuable point was made - one which had slipped my mind. The CTC Council commissioned independent advice on the tax position. The vast majority of the members have never seen the unedited version of that advice - the one that Council decided quite deliberately not to publish.

[swansonj]

And, could you also tell me why the insurance fact sheet for rides leaders now makes 5x5 a rule? Because I'd like to continue running the FNRttC as a CTC ride, and right now, that's not possible.

Off-topic, I know, for which apologies, but what is the "5x5" rule?

[Simon L6]

And, could you also tell me why the insurance fact sheet for rides leaders now makes 5x5 a rule? Because I'd like to continue running the FNRttC as a CTC ride, and right now, that's not possible.

Off-topic, I know, for which apologies, but what is the "5x5" rule?

the rule says that no more than five non-members can go on a club run and a non-member cannot go on more than five club runs.

Now, (without appearing too big-headed) the rides that I lead have loads of non-members on them. The trick is to persuade them to join, and (holds head firmly to prevent from total bigness) I've had some success. Following the 'Best Cycling Event in London' award (head now rapidly enlarging) I'm expecting a lot more non-members to come in 2011.

Now the trick is to do all you can to make sure that the ride is as safe as possible, and we do a lot, including recce'ing every route in full, often three times, to ensure that it is safe. But......we all make mistakes and I'm reluctant to lead a club run of 100 or more through the night without Rides Leaders Insurance. I can understand that conversations take place between the Club and the insurers, and I did know that the 5x5 thing was guidance, but if it's in the factsheet then I have to take it as carved in tablets of stone.

I'm hoping that this can be fixed, but my point to Barry was this - get the basics right.