The value of sponsorship agreements in place for racehorse owners has grown enormously ahead of the planned Revenue and Customs review of the VAT Registration Scheme.
At the end of August 2005, the value of racehorse owner sponsorship was £8.7m, well in advance of the full-year totals for every year on record since the Scheme began, and on course to exceed £10m for the whole of 2005. At the end of August 2004, the figure was £3.9m, with the respective figure for 2003 £2.5m.
As well as the substantial rise in sponsorship values, there has been an increase in the percentage of horses in training covered by sponsorship agreements, with the figure for each month of 2005 standing at 75% or higher.
The VAT Scheme for Racehorse Owners allows all owners the opportunity to register for VAT, and thus reclaim the VAT on all their racing related expenses. In order to be able to register, owners have to generate business income through sponsorship.
The Scheme was launched in 1993 and is estimated to be worth in excess of £20m annually to the Racing and Breeding Industries. It was extended in 1997 and 2002, and in light of the next planned review, BHB convened a Working Group last summer, under the Chairmanship of Jeff Ennis MP, with the task of raising awareness of the Scheme, increasing the number and value of sponsorships in place and complementing the methods through which the Scheme is policed.
To ensure the Scheme is correctly observed by those signed up to it, BHB employs four Sponsorship Compliance Officers to monitor the logos worn on racecourses.
The total value of owner sponsorship agreements for the last five years is as follows:
2005 (end of August) £8.73m
BHB Marketing Director Chris John said: “The increases in sponsorship values and the number of horses covered by sponsorship agreements reflect the tremendous work that has been undertaken across the sport. Racing and Breeding derive great benefit from the very important VAT Scheme, and the work of the Sponsorship Compliance Officers on the racecourse has been vital in communicating its advantages and operation, raising contract values so dramatically and protecting the Scheme’s integrity.”