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Budget boost for owners as VAT scheme is extended.

BRITISH racehorse owners were yesterday saluting chancellor Gordon Brown after he announced in his Budget that there would be an extension to the VAT registration scheme, which is worth about pounds 20 million a year to the sport and will continue for the lifetime of the current parliament, writes Paul Binfield.

The scheme, introduced in 1993, was under review after previously being renewed twice by the government, in 1997 and 2002.

It allows owners to register for VAT once they have secured business income in the form of sponsorship, and reclaim the VAT on racing-related expenses such as training fees.

Since the last renewal, tax officials have remained cautious of the scheme, which costs the Treasury an estimated pounds 20m a year.

However, the BHB's VAT working group, chaired by Labour MP Jeff Ennis, has lobbied the government since November, highlighting the detrimental effects to the racing industry and the government were the scheme to be withdrawn.

A study by KPMG, which accompanied the November submission, warned that abolishing the scheme would reduce the number of horses in training by a quarter, risk losing up to 10,000 jobs, and cost the Treasury up to pounds 86.5m in tax revenues.

The total value of owner sponsorship contracts in 2005 stood at pounds 10.6m, up from pounds 3.2m in 2001, while the number of horses in training stands at an all-time high.

The effectiveness of the scheme is also reflected by the rise in the percentage of horses in training covered by sponsorship contracts - 77 per cent in 2005 compared with 63 per cent in 2001.

Ennis said: "This is the result that everyone in British racing and breeding has been looking for."

BHB chief executive Greg Nichols said the scheme was vital, adding that it was "a huge factor behind the record numbers of horses in training and owners in the sport".

In other Budget news, Fixed Odds Betting Terminals (FOBTs) previously not covered by the Gambling Act are to be brought into that regime in the same manner as other betting machines.

This measure will affect virtual horserac-ing games and electronic roulette machines in Britain's betting shops.

As expected, the rate of betting duty for bookmakers was unchanged at 15 per cent of gross profits, and there was no change in the treatment of betting exchanges.
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Title Annotation:Sports
Publication:The Racing Post (London, England)
Date:Mar 23, 2006
Words:390
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