Maximising Owner Sponsorship

Under the VAT Scheme, receiving sponsorship income allows owners to register for VAT, enabling them to recover VAT on their racing activity.

The ROA / Tote Owner-Sponsorship Scheme provides a simple means by which owners can take advantage of this concession. Each year the scheme covers over 1,500 horses and the sponsorship agreements are lodged with Weatherbys.

With the cost of keeping a horse in training in the region of £18,500 to £23,500 a year, an owner can expect to reclaim around £3,700 to £4,700. This doesn’t take into account any VAT element on a horse’s purchase price, which can also be recovered.

VAT is recoverable on costs that are invoiced to the VAT registered entity for relevant supplies.VAT on the following can be recovered as input tax:

  • Racehorse purchase
  • Associated bloodstock agent fees
  • Training fees
  • Veterinary fees
  • Farrier fees
  • Horse Transport fees
  • Gallops fees
  • Jockey fees, including any retainer agreement
  • BHA registration and administration fees
  • (Sole ownership, partnership, syndicate registrations, Authority to Act, Sponsorship registration, D1 or D2 authorisation fee, VAT administration fee, colours fee, naming fee)
  • Racing silks purchase
  • ROA membership fee
  • Accommodation when watching horse run – only the VAT entity can reclaim, this must be if it is reasonable for accommodation to be required watching a horse run for one night’s stay on either the day before, or the day of the race.
  • Telephone bills (10% of total VAT charged is recoverable)
  • Fuel - If you buy road fuel and it’s used for both business and private motoring, you can recover the VAT you’re charged on all of the fuel as input tax, but you must pay an output tax scale charge. The output tax scale charge will be determined by the nominated vehicle’s emissions in accordance with the HMRC fuel scale charge tables.
  • Other less common items may require a business case to be put forward to HMRC, e.g. purchase of a horse box
  • Where the goods or services are partly for the purpose of your horse racing activities and partly for non-business (or private) purposes, you can treat a fair and reasonable proportion of the VAT you’ve been charged as input tax.

For more information:

https://www.gov.uk/guidance/registration-scheme-for-racehorse-owners-notice-70067

https://www.gov.uk/guidance/vat-on-motoring-expenses-notice-70064