VAT registration scheme for racehorse owners: special ownership categories for racehorse owners
Point-to-point racing/hunter chasing
Point-to-Pointing (PTP) is an amateur sport which falls within the broad definition of horseracing and is encouraged as a potential training ground for steeplechasers.
The majority of PTP meetings are staged by local hunts. Meetings take place between December and June. The hunts may be registered for VAT but the holding of meetings is not seen as a part of their business activities. There are over one hundred PTP racecourses and an annual fixture list is issued before the start of the season.
Although PTP racing is regulated by the Jockey Club, owners are not eligible to register under the Scheme until their horses graduate to racing as hunter chasers.
Qualifying point-to-point horses
A qualifying point-to-point horse is one for which an owner has a sponsorship agreement and which is entered in a hunter chase. If an owner gets a qualifying horse it will not lose that status if it is covered by a sponsorship agreement and the intention is for it to compete in hunter chases in the year of purchase.
An owner of a qualifying horse can register for VAT for the hunter chasing season. They should follow the registration procedure set out at VBNB50200. The effective date for VAT registration purposes will be the date of the first race the horse is entered for.
If an owner is already registered for VAT they do not need to apply for separate registration. However they must still complete form D1 or D2 (see VBNB50200) and notify their local HMRC Business Centre. Details of local Business Centres are available by phoning 0845 010 9000.
An owner can continue with their VAT registration at the end of the hunter chasing season if:
- they can show their intention is to enter the horse in hunter chases in the following season; and
- their existing sponsorship agreement is to continue, or they intend to obtain sponsorship before the horse competes in its first race of the new season.
Otherwise their registration will be cancelled or, if it is continuing for other purposes, they will not be able to recover any VAT they are charged in connection with the horse.
Permit holders are national hunt trainers with amateur status who generally train horses they own and/or those owned by relatives.
They may register under the Scheme provided they meet the requirements for doing so. As permit holders undertake their own training they will probably incur VAT on a wider range of goods and services than an ordinary owner. This can include:
- loose boxes;
- tack; and
- office accommodation.
If these goods and services are used wholly for business purposes any VAT incurred may be recovered in full as input tax. However, it is more than likely they will also be used for non-racing stock such as horses kept for recreational riding, or horses owned by relatives and for which no charge is made. When this happens an apportionment of VAT will be necessary.
A simple method is to use the number of horses owned and raced by the permit holder expressed as a percentage of the total number of horses in the yard. Other methods may be agreed provided they give a fair and reasonable result.
Once registered, permit holders must account for output tax on any taxable income they receive. This will include contributions made by relatives toward training costs.