|Thursday, March 23, 2006|
|Great News for British Racing and Breeding as VAT Scheme is Renewed Again|
The British Horseracing Board’s efforts to demonstrate to Government the significant value of the VAT Registration Scheme for Racehorse Owners have been rewarded with the announcement today that the Scheme will again be extended.
Chancellor of the Exchequer Gordon Brown confirmed in his Budget that, following a periodic review by HM Revenue and Customs and the Treasury, the Scheme will continue for the lifetime of the current parliament. It was first introduced in 1993 and was renewed by Government in 1997, 2002 and now 2006.
The Scheme allows racehorse owners to register for VAT once they have secured business income in the form of sponsorship, and then reclaim the VAT on their racing-related expenses and has played an integral role in the current record levels of investment in British Racing. The total value of Owner Sponsorship Contracts in 2005 stood at £10.6m, up from £3.2m in 2001, while the number of horses in training stands at an all-time high. The effectiveness of the Scheme is also reflected by the rise in the percentage of horses in training covered by Sponsorship Contracts: 77% in 2005 compared with 63% in 2001.
In preparation for Government’s review, BHB set up a Working Group in July 2004 chaired by Jeff Ennis MP and comprised of representatives of many sectors of the sport. British Racing made a detailed submission to HM Revenue and Customs in November 2005, which also highlighted the potential impact on the economy if the Scheme were to be withdrawn. A report by leading consultants KPMG showed that there would be a loss of between 4,050 and 10,100 jobs and a decrease in tax revenues of between £11.4m and £86.5m.
Jeff Ennis said: “This is the result that everyone in British Racing and Breeding has been looking for. The industry has worked tremendously hard in recent years to get the best out of the Scheme, which has contributed to record sponsorship income and more horses in training. It has also helped Racing and Breeding more generally, which is responsible for tens of thousands of jobs and generates millions of pounds of investment into Britain.”
BHB Chief Executive Greg Nichols added: “The sport is appreciative first of Jeff Ennis and his team, who developed a compelling case, and secondly of Government for recognising the importance of the VAT Scheme not only to Racing and Breeding but to the wider economy. The Scheme is vital to our industry, and is a huge factor behind the record numbers of horses in training and owners in the sport.”