HMRC internal manual

VAT Business/Non-Business Manual

VAT registration scheme for racehorse owners: background to VAT registration scheme for racehorse owners

The VAT Registration Scheme For Racehorse Owners (the “Scheme”) started on 16 March 1993. The main principles were set out in a Memorandum of Understanding (MoU) with the Thoroughbred Horseracing and Breeding Industry. This is set out at VBNB50100 and still applies to owners registered on and before 31 December 1997.

The Scheme was reviewed during 1996/97 and Ministers decided that it would continue, but with changes to take effect from 1 January 1998. A revised MoU incorporating the changes was agreed with the British Horseracing Board. This is reproduced at VBNB50150.

You may find it useful to refer to the glossary of horseracing terms at VBNB58400 when reading this part of the manual.

If a racehorse owner meets the conditions of the scheme HMRC accepts that racehorse ownership is a business activity. The owner can register for VAT and recover some of the VAT charged on their expenses as input tax. Owners may include:

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

A racehorse owner can apply for VAT registration under the scheme if they are registered as an owner at Weatherbys and they:

  • own a horse or horses covered by a sponsorship agreement registered at Weatherbys; or
  • own a horse or horses covered by a trainer’s sponsorship agreement registered at Weatherbys; or
  • can show they have received, and will continue to receive, business income, for example from appearance money or sponsored number cloths from their horseracing activities.

There are special arrangements for owners of point-to-point horses that qualify for racing in hunter chases. You can read more about those arrangements at VBNB52700.