New Licensing Rules for Syndicates: What Racehorse Owners Need to Know About VAT

Starting January 1, 2025, anyone looking to set up a new racehorse syndicate or racing club will need to apply for a license from the British Horseracing Authority (BHA). This change is designed to make shared ownership in racing more transparent, trustworthy, and well-managed. But if you’re a racehorse owner dealing with VAT, here’s how these new rules might affect you.

What’s Changing?

The BHA’s new licensing process builds on the current registration system. It makes sure that anyone managing a syndicate or racing club meets certain standards, such as:

• Being clear and honest about how the syndicate operates.
• Showing they have the skills to handle money and manage the business.
• Knowing how to advertise and promote shared ownership responsibly.

The license won’t tell you how to run your business, as long as it meets the rules. Instead, it’s about giving everyone involved in shared ownership confidence that things are being done properly.

Why It Matters for VAT

If your syndicate is VAT-registered or you claim VAT under the Racehorse Owners Scheme (ROS), the new licensing rules tie in closely with how you handle your finances. Here are the key points:

1. VAT Registration and Financial Records
   If your syndicate is VAT-registered, the person in charge needs to manage money carefully and keep proper records. This includes making sure all income and expenses are logged correctly for VAT purposes.
2. Splitting Costs and Revenue
   Syndicates usually share costs (like training fees) and income (like prize money). The new rules will make it even more important to be clear about who pays what and how money is handled—something that’s essential for accurate VAT claims.
3. Marketing and VAT
   If your syndicate earns money from things like sponsorships or selling merchandise, this income could be taxable for VAT. Being licensed means keeping an eye on these details to stay compliant.
4. Claiming VAT Under the Racehorse Owners Scheme (ROS)
   If you use the ROS to claim back VAT on racing costs, you’ll need to ensure your syndicate meets the licensing rules. The BHA’s focus on clear financial management will help with the kind of record-keeping that HMRC expects.
5. Support Is Available
   The BHA is offering step-by-step guidance to help with licensing applications, and organizations like the Racehorse Owners Association can provide advice on VAT-related questions.

Why This Is Good for Shared Ownership

Shared ownership is growing fast—it’s an affordable and exciting way to be part of racehorse ownership. The new licensing system aims to keep it fair and well-run, which is great news for everyone involved.

Harry Williams from the BHA says the new rules will help ensure shared ownership continues to thrive while giving people confidence that syndicates are safe and trustworthy. Similarly, the Racehorse Owners Association has praised the move for creating clear standards and helping attract new people to the sport.

What’s Next for Racehorse Owners?

If you’re already running a syndicate, the BHA is offering plenty of help to make the transition smooth. For anyone planning to set up a new syndicate after January 2025, the license will be a key step in getting started.

For owners dealing with VAT, this is a chance to streamline your finances, stay compliant with HMRC, and ensure your syndicate runs smoothly under the new rules. By meeting the BHA’s standards, you can focus on what really matters: enjoying the thrill of racing.