Tax Break for Racehorses

Horse racing.

There are around 8,215 racehorse owners in the UK, ranging from gentry to plumbers united in their love of the sport.

But this is not an investment for the faint-hearted. You are unlikely to make a fortune and could end up losing a huge amount of money. The Racehorse Owners Association says that for every £100 of annual outlay (not including the purchase cost of the horse), a racehorse owner is likely to see a return of just £21.

As reported in the Telegraph (12th February 2013)

Some times it can pay off….

Rugby star Mike Tindall was branded an “idiot” by his wife Zara Phillips when he splashed out £12,000 on a racehorse.

But Mr Tindall is now looking far from stupid as his impulse purchase won last month’s Welsh National. Monbeg Dude, which Mr Tindall owns with four others, is now said to be worth more than £200,000.

VAT Tax Break for Racehorses

Following an agreement with the Thoroughbred Horseracing and Breeding Industry a scheme known as the VAT registration scheme for racehorse owners was introduced on 16 March 1993. If you meet the conditions of the scheme HMRC will accept that racehorse ownership is a business activity. You can therefore register for VAT and recover some of the VAT you are charged on your expenses as input tax.

Owners may include:

  • breeders;
  • dealers;
  • trainers; and
  • racing clubs.

You can apply for VAT registration under the scheme if you are registered as an owner at Weatherbys and you:

(a) own a horse or horses covered by a sponsorship agreement registered at Weatherbys; or

(b) own a horse or horses covered by a trainer’s sponsorship agreement registered at Weatherbys; or

(c) can show you have received, and will continue to receive, business income for example from appearance money or sponsored number cloths (SNC’s) from your horseracing activities.

You can recover as input tax the VAT you are charged on the purchase, training and upkeep of a racehorse and any overhead expenses used for the purpose of your business.


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