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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Particular trades: Horserace Betting Levy Board

Receipts from the Horserace Betting Levy Board

The Horserace Betting Levy Board is charged with a statutory duty of assessing and collecting contributions from bookmakers and applying them for the following purposes:

  • the improvement of breeds of horses and of horse racing;
  • the advancement or encouragement of veterinary science or education.

Payments made by the Levy Board for the above purposes should be dealt with in the hands of the recipients as follows:

  • A lump sum paid to a person carrying on a trade (which includes the occupation of land for the purposes of husbandry, for example, as a stud farm) should be treated as a capital receipt if the payment is earmarked as a contribution towards specific capital expenditure.
  • Where, however, the contribution is towards revenue expenditure, only the net outlay of the recipient after deducting the contribution should be treated as an allowable deduction in computing their profits for tax purposes.
  • If a contribution is received towards capital expenditure on assets, for example, plant and machinery, which would otherwise qualify for capital allowances, then only the net expenditure will attract such allowances.
  • A revenue payment which is made for the general purpose of the recipient’s trade should be treated as a trading receipt, see BIM40450 onwards.

A payment to a person not carrying on a trade will not be liable to tax unless it:

  • is made for services rendered; or
  • constitutes an ’annual payment’ chargeable to tax as miscellaneous income. Such a payment is a payment to which the recipient has a right and which has the quality of recurrence over a period exceeding a year, is not merely an instalment of a pre-determined capital sum, and is made without conditions or counter-stipulations.

A case involving a payment which does not appear to be covered by the above guidance should be submitted to CTISA (Technical).

As regards the treatment of a contribution payable by a bookmaker to the Horserace Betting Levy Board, see BIM51251.