Now industry talks with united voice…
THE horse industry has at last agreed on a single lobbying voice, which should in time help everyone in rural areas, from riding school proprietors to farmers. The British Horse Industry Confederation was formed in March this year, and has since worked hard to give the horse industry a voice in Westminster.
Michael Clayton the chairman of the BHIC and former editor of Horse and Hound has been knocking on doors to explain how vital a thriving horse industry is to the countryside and to Britain as a whole – and why it needs tax concessions.
Previously, without a political united voice the legal and financial aspects of keeping horses have become a mess. For instance, for income tax purposes the commercial breeding and rearing of horses is already classed as an agricultural activity, yet it is not where VAT, planning permission and business rates are concerned
"Unfortunately 100% agricultural status would cause a problem in European legislation regarding [drug residue levels and] the food chain," says Mr Clayton.
The horse lobby is therefore after agricultural status for the horse up to the age of four. This would benefit the breeding industry. Ashley Ede of accountants Morison Stoneham explains: "The significant burden of business rates would be removed as studs would qualify for the same rates relief as farms on their buildings and land. This would provide welcome relief for British breeders who are suffering from the strength of sterling and a very favourable tax climate enjoyed by Irish breeders and agricultural status enjoyed by other EU member states."
Mr Clayton hopes that this will provide the raw materials for British riders to regain the top rankings in show jumping, dressage and eventing/riding British horses.
Tenant farmers will also benefit from giving horses agricultural status. They could more easily diversify into horse breeding – as on the continent – without jeopardising the terms of their agreements or losing the right to house staff in tied accommodation.
Sadly riding schools, a sector in serious decline, would not fit in the BHICs proposed definition of agricultural status. These businesses cannot currently obtain tax relief in the form of capital allowances on their buildings and land. Equestrian buildings need to be constructed of good quality materials and comply with both human and equine health and safety. They are expensive to construct, cannot be easily used for alternative purposes and more likely to depreciate more quickly due to their design and daily wear and tear.
"It would make sense to allow all equestrian businesses to depreciate their buildings and artificial surfaces for tax purposes given their limited life-span," adds Mr Ede.
Mr Ede believes they have good grounds for qualifying for rates relief because they are providing both education and recreation to local communities and contributing to the preservation of the countryside.
Many riding school owners are currently receiving rate reviews and it is essential that any businesses concerned by the level of their rates appeal to the Government Valuations Office. It is difficult to negotiate a change later, so everyone should be careful what they agree. Valuations are partly settled through comparisons, so if one riding establishment settles for a high figure it will make it that much harder for others to achieve a reduction."
With the equine industry contributing £2.5billion a year to the rural economy and providing 150,000 jobs Mr Clayton is hopeful of gaining the governments attention. "A first stage will be to have a ministry or minister with specific responsibility for horses. The only person to make that decision is the Prime Minister, and he has had a strong recommendation from an all party committee."
Mr Clayton also believes that the horse provides a good future for farming and the countrysides appearance and economy. "It does offer diversification, it involves traditional farming skills of animal and pasture husbandry, it keeps land down to grass and it is labour intensive."