While Horse Racing has remained one of the world’s most archaic yet well-respected traditions, the industry has only continued to soar in popularity over the past few decades which has allowed competitions to gain a much wider state of interest from a variety of media sources as well as parties that are all connect by the constant changing of tax reforms.
The simple explanation of tax reforms are basically the various methods that the government uses to alter the process of collecting and managing taxes in an effort to improve tax administration or long-term economic decision making.
Within the UK, the Capital Gains Tax rate applied to carried interest will increase from 28% to 32% from April 2025 before it will ultimately transition to the Income Tax framework from April 2026 which amounts to a total effective tax rate of 34%, which remains below the top Income Tax rate of 45% that is paid by the nation’s highest earners, bringing in a projected sum of £85 million in revenue by the years 2029/30.
This increase in the Capital Gains Tax rate could greatly affect a number of industries within sports with horse racing being very likely to be affected most significantly across the coming months, as many ambassadors and executives within the upper echelon of the sector strongly believe that this could place the entire balance and establishment of the racing ecosystem at serious risk or potential destruction.
While the industry is certainly flourishing with its current levels of interest and investment opportunities that were previously mentioned, many horse racing chiefs still fear the worst possible outcome for this new ruling or rather adjustment of reform tax, leaving many to question at what the greatest implications could amount to and how it will affect the industry and those who are professionally involved.
- Why the latest tax reforms could greatly affect horse racing in the UK:
Without question the main driving force behind the success and constant uproar in popularity within horse racing stems from the involvement in betting on races or various different outcomes as numerous fans flock to the major venues to place a variety of wagers or are more than eager to bet while at home, with bookies offering a wide range of horse racing betting odds throughout the course of the active season.
Sports betting continues to draw in a significant portion of interest and earnings for all racing events as it has remained one of the industries longest withstanding traditions since the sport’s earlier years of inception.
However, with the new plans issued by the Treasury to implement a flat-rate tax on numerous different parties, horse racing betting firms and bookmakers will be greatly affected by these sudden changes as they will also be taxed at the same going rates that online slots and casino gaming sites continue to be charged, which comes in spite of a very clear and obvious disparity between how both forms of gambling perform fundamentally.
According to the All-Party Parliamentary Group for Racing and Bloodstock, these new Treasury plans will bring about job losses and economic hardship to various renowned racing destinations and markets such as Doncaster and Newmarket, with these such towns benefiting greatly from the income that racing events continue to pour in on a regular basis.
The British economy gains a staggering contribution of over £4.1 billion every year from racing as well as supporting more than 85,000 jobs across the nation, but this is very dependent on the funding that bookmaker’s intake for its stability and continued support, which is something that is now under severe duress with these latest tax reform plans.
- How does the industry hope to combat these potential issues?
The British Horseracing Authority (BHA) has already made its case as to why these plans should be opposed and has quickly urged stakeholders within the industry to collaborate on a collective lobby that plans to reject the proposal.
The BHA will also issue a formal response to the UK Treasury on its latest consultation plans and the overriding amount of concerns that such a change will bring.
There has been a recent breakthrough regarding a commitment struck between Treasury Minister James Murray MP as a means to work with those representing the industry to resolve a manner that will prevent an unwavering and highly probable implications that could affect the sport.
BHA Chief Executive, Brant Dunshea, has also commented on the matter and has stated how vital it is for industry stakeholders to join the lobby as a means to protest the Treasury’s rulings in a message that plans to “Axe the Racing Tax”.
To conclude, the horse racing industry remains at a threating stage of facing potential destruction from the taxing of various related bookmakers which has forced the BHA to intervene and combat these latest actions that have been put in place by the UK Treasury as a means to keep the industry functioning and persevering the sports betting’s strong economic presence that has made horse racing the staple that it is today.