The rural community are up in arms about the upcoming change in business rates. Last week the tabloids ran an article about how the change in business rates in the UK from April 2017 will have a dramatic, negative impact on equestrian businesses.
The biggest change in business rates comes in the forms of Rateable Values. These rateable values are based on the physical size of the business buildings, i.e. stables and arenas. The average increase in rateable value for English businesses is 9.6%, however riding schools and livery yards are findin they have massive increases of 180%, if not more!
The BHS has campaigned for years about the impact of business rates on small equestrian businesses, and in response to recent upcoming changes they have written to every MP in England and Wales to ensure that they are aware of the devastating impact on the equine industry within their constituencies, but so far the only positive development is an increase in the small business rate threshold from next year. The BHS is advocating that all riding schools and livery yards get involved by writing to local MPs to explain the impact the change in rateable values will have on their business.
Let’s look more about how measuring the size of a business based on it’s physical size disadvantages equestrian businesses. Firstly, horses require a lot more space than dogs or offices, say, which means you need more square footage per rentable space. But you can’t charge livery fees based on that otherwise it will be astronomical. Secondly, some equestrian businesses by their very nature have times of the year when boxes stand empty. For example, a stud farm with twenty boxes may only have two in use during autumn and winter for the resident stallions, yet come spring and summer all twenty will be in use by mares coming to stay to be covered. Furthermore, a foaling box needs to be significantly bigger than a normal stable this means that it is more expensive with regard to rateable values because the building is bigger. Other businesses that have a fluctuation in their resident population are eventing, polo and racing yards because work still has a season.
A lot of livery yards are converted farm buildings, which means that they aren’t very efficient. Conversions may mean stables vary in size, or there is an extra unused barn, or just areas of wasted space. Some yards may have been full to bursting ten years ago, but due to their owners getting older or starting a family, they now run on a smaller scale, leaving some boxes empty. With the rateable values these businesses will still be charged for these boxes.
So what does this mean for equestrian businesses? Ultimately, owners will not have the incentive or financial ability to invest in their business and facilities; prices will go up, out of many people’s budget so riding schools will lose revenue and be forced to close, meaning that equitation and horse ownership will only be enjoyed by the very rich and those who have the ability to keep their horse at home. Equally this is going to put more strain on equine charities as horses are abandoned or neglected due to a lack of finances.
So what’s going to happen? To quote my mother, Heaven only knows. All we can hope is that the government comes to their senses, listens to us lowly equestrians, and makes some changes before the horse industry crashes, especially when you look at the following figures which highlight the “magnitude of the sector” and suggest the domino effects on wider society.