The horse racing industry is expecting a £10m rise in costs after being excluded from new business tariff relief due to come into effect next April – a move that coincides with fears of a new tax rise on betting in the coming Budget.
According to research by Colliers, racing yards are among several categories set to lose access to the current 40 per cent tariff relief as they face average increases of more than £7,000 per yard – representing a 40 per cent rise in total commercial rates bills across the sector.
The property consultancy estimates that around 300 apprenticeships, covering around 90 per cent of the sector, currently benefit from the relief but will now be excluded from the new system, which only applies to venues used “wholly or principally” for retail, hospitality or leisure activities for the public.
The National Trainers Federation and the British Horseracing Authority (BHA) have started working together to make their members aware of the changes and campaign for clarity ahead of the Budget on November 26.
The Treasury’s overhaul is part of its wider plan to make the business rates system “fairer and fit for the 21st century”, with permanently lower multipliers for smaller retail, hospitality and leisure establishments with rateable values below £500,000.
However, this lower rate will be funded by a higher multiplier for all other commercial properties – including racing yards, laboratories and large-scale facilities – when the new system comes into force from April 2026.
John Webber, head of business rates at Colliers, warned that many trainers could find it difficult to absorb the additional burden: “Trainers operate on thin margins and employ many people on low wages. Increases in employers’ National Insurance contributions and the national minimum wage have already hit them hard. Adding increased business rates could push some over the edge.”
He added that while the Treasury’s relief plan was aimed at supporting high streets, excluding the horse racing and betting industries poses “further harm to the struggling local economy”.
The reform will also affect more than 6,000 betting shops, which Colliers estimates could pay a total of £10 million more a year in business rates compared to similarly sized retail outlets eligible for relief.
The betting sector is already under pressure amid speculation that Chancellor Rachel Reeves will increase gambling tariffs in the Budget later this month – a move that industry groups have warned could lead to widespread betting shop closures.
“Taxing the betting industry will not help high streets – it will just lead to more empty shops,” Webber said. “And the knock-on effects are significant: less money for bookmakers means less money flowing back into British horse racing.”
A Treasury spokesman said the new system would make interest rates fairer overall and introduce lower rates for most retail, hospitality and leisure businesses, while imposing a higher fee on less than 1 percent of high-value commercial properties.
“We are making rates fairer for businesses by introducing permanently lower rates for retail, hospitality and leisure from April, funded by a higher rate for the most valuable commercial properties,” the spokesman said.
They added that the government remains committed to supporting the UK business environment: “We have capped corporation tax at 25 per cent – the lowest in the G7 – secured key trade deals with the US, EU and India and seen five rate cuts since the election to help businesses across the UK.”
Treasury sources also stressed that the ministry “recognizes that horse racing is part of the cultural fabric of the country” and has no plans to change the tax treatment of racetrack betting, which remains exempt from tax.
The horse racing sector – which supports more than 85,000 jobs and contributes around £4.1 billion a year to the UK economy – now faces double headwinds from both tariff reform and a possible increase in the betting levy.
Industry leaders warn that without targeted support, smaller racing yards and rural racing operations could close, dealing a further blow to Britain’s reputation as a global equestrian center.
