The horse racing industry is facing a potential setback due to the government’s new business rates policies, according to business rates experts at Colliers. These policies, set to take effect in April of next year, could have a detrimental impact on the industry unless the government takes action promptly.
The government recently released detailed guidance outlining the eligibility for the new retail, hospitality, and leisure (RHL) lower business rates multipliers, which will coincide with the 2026 revaluation. These lower multipliers are designed to compensate for the loss of RHL business rates relief that the sector has relied on since before the COVID-19 pandemic. However, this relief has been gradually reduced from 100% during lockdown to 75% in subsequent years and is set to completely disappear in April of 2026.
Under the new system, the government will introduce two lower business rates multipliers for RHL properties in England with rateable values (RVs) below £500,000. This includes a small business multiplier for properties with an RV under £51,000 and a standard multiplier for properties between £51,000 and £499,999. The government has stated that the new small RHL business multiplier will be up to 10p in the £ lower than the standard multiplier announced in the Budget.
In its guidance, the government has listed the categories of RHL that will benefit from the new multipliers and those that will be excluded. One notable exception to this new relief is the horse racing industry.
Until now, racing yards have been able to claim RHL relief at a rate of 40%. However, the government has made it clear that these properties will not qualify for the new lower multiplier, and the relief is scheduled to be completely removed in April of next year. This is because the new multipliers will only apply to properties or venues that are “wholly or mainly” used for in-person retail, hospitality, or leisure activities for “visiting members of the public.”
According to John Webber, Head of Business Rates at Colliers, this decision could have devastating consequences. He explains, “The actual impact will depend on each property’s rateable value, but for most yards, this change will mean a return to full business rates liability. Trainers operate on small margins, and the recent increases in employers’ National Insurance contributions and the National Minimum Wage have already had a significant impact on them. Adding increased business rates costs could push many over the edge.”
Colliers estimates that rates bills for the sector could increase by at least 40%, resulting in an average increase of over £7,000 per yard and a total increase of over £10 million next year. This will have a considerable impact on the industry.
Another category excluded from the list is betting shops, which will indirectly affect the horse racing industry as they help drive footfall into the high street. With over 6,000 bookmakers in the country, Colliers estimates that they could end up paying over £10 million in business rates per year when the new multipliers come into effect in April of 2026, which is significantly more than similar shops.
Webber comments, “Taxing the betting industry will not help the high street and will only lead to more empty shops. Furthermore, the knock-on effects are far-reaching, such as the impact on the horse racing industry. Less money for British bookmakers means less money for British horse racing – an industry that is already under attack from the Chancellor’s business rates strategy.”
This blow to the betting industry comes on top of a further threat from the Chancellor to increase the tax on gambling firms in the upcoming Budget. Last month, Betfred’s Fred Done warned that such a tax hike could result in the closure of all 1,287 Betfred shops in the UK, putting 7,500 jobs at risk. Other bookmakers have echoed this sentiment, citing that these taxes are unsustainable, especially with the increase in employers’ National Insurance last April.
Webber says, “The list of who will be eligible for the new lower multipliers appears to be quite arbitrary. We are not sure why there is a distinction between casinos, gambling halls, and bingo halls (who will be eligible for the lower multiplier) and betting shops (who will not).”
He continues, “Additionally, we have health spas, wellness centers, and massage parlors eligible for relief, but small businesses offering physiotherapy, osteopathy, or chiropractic services are not. Opticians will be eligible, but businesses offering hearing services are not.”
“It is also unclear why the government was previously willing to support and provide RHL relief to training yards but is now taking it away, despite their importance to the horse racing industry, a widely enjoyed leisure event.”
Webber adds, “By stating that eligibility for the lower multiplier will be determined according to its new statutory definitions, the government has removed the local authority’s discretion in deciding what is best for their local business community