Did you know they tax horses? The tax man isn’t always as nice as the VAT man. Apparently the tax man doesn’t like horsey people but the VAT man does. Here’s a story for you.
The criteria to adhere to on horse tax
Are you aware that you can register for VAT if you have racehorses or point to point horses provided;
• you own a horse or horses covered by a trainer’s sponsorship agreement registered at Weatherbys;
• you can show you have received, and will continue to receive, business income from appearance money or sponsored number cloths (SNC’s) from your horseracing activities.
There are special arrangements for owners of point-to-point horses that qualify for racing in hunter chases.
What can you claim?
You can recover VAT on the purchase, training and upkeep of a racehorse and any overhead expenses used for business purposes.
What do you pay when it comes to tax?
VAT on the sponsorship income, prize money and appearance money they receive.
If you sell a horse or part share in a horse you must normally charge VAT.
If you’re not charged VAT on the purchase, you can use the margin scheme for second hand goods. This allows you to account for VAT on the profit margin rather than the full selling price.
If you have racehorses, take note as it could save you a fortune! Get in touch with us for advice on this or any other matters.