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George Osborne

Chancellor of the Exchequer George Osborne delivers the budget

  PICTURE: BBC  

Budget could be good news for bloodstock

THERE couldbe ways for the bloodstock industry to take advantage of the measures outlined by George Osborne in his budget yesterday, according to bloodstock accountants.

The extension of the capital gains tax "entrepreneurs relief" rate of ten per cent from the first £2m to the first £5m could also be attractive to people wishing convert old farms into studs. The vendor would only pay ten per cent tax, accountant Julie Butler said yesterday.

"Anyone with a stud or equine business who has bought a property and done it up to sell for retirement would benefit by this attractive rate of relief."

She also added that stud owners and trainers could also take encouragement from the £21 rise in the threshold at which employers start to pay National Insurance per week, saying: "It would have to be beneficial for employees on low paid basis or part time staff in the bloodstock industry."

However, if the budget has the desired deflationary effect on the economy, consumer spending, especially on luxury goods such as bloodstock, will be affected.

Butler also warned that the rise in VAT from 17.5 per cent to 20 per cent has the potential to be destructive to owners unless all registrations for the Racehorse Owners Scheme – under which owners can reclaim their outlay on VAT providing they gain sponsorship for their horse to be registered for VAT – are completed in time for the change on January 4.

Terry Dockley, VAT director of equine accountancy James Cowper, said yesterday: "The VAT increase has less of an impact now that it would have had 17 years ago, before the Racehourse Owners Scheme was set up.

"Only owners not prepared to register for that will be hurt, and I cannot see a downside to joining."

 

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