Report - Section 7.4

7.4   Equestrian activity, the rating system and VAT

Rates are levied on equine buildings and horse breeding establishments. This places a large burden on operators - and is perceived as inequitable for riding in relation to space requirements and profitability in other sectors. HWBG report that businesses have closed in the Leaderplus area as a result.

Recognising the difficulty that this has been causing, the government’s Action Plan for Farming 2000 extended rate relief for farmers diversifying into horse-based enterprises. This was subsequently extended to all new farm-based diversification applications. 50% rate relief is mandatory, and local authorities have discretion to extend this to 100% relief³¹, providing the conditions are met, for a period of up to 5 years.

The issue of rating equestrian buildings and activity is a key issue and deserves more detailed research on the opportunities and constraints, probably at a national level.

Horses are also subject to VAT when sold. Annexe A of the 6th VAT Directive allows for member states of the EEC to consider the raising of horses as an agricultural activity: the UK government chooses not to do so. Again, it may be appropriate for lobbying at a national level.

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³¹ UK Equestrianism, NFU Economics, NFU October 2002