Equestrian businesses could benefit from new legislation that will significantly reduce their tax bill.

From April, businesses will be entitled to a £2,000 tax cut on their national insurance contributions (NICs) — the tax an employer pays on their employees.

It will mean, for example, that a business can employ 4 adults or 10 young people aged 18-20 years old full-time on the national minimum wage without paying NICs at all. Or it can employ 5 adults full-time and receive a tax cut of over 80%.

The so-called employment allowance will be of greater benefit to small businesses, as it will reduce their NIC bill the most.

Lucy Katan, director of the British Grooms Association (BGA), said the news was a “positive boost” for the industry.

Anything that helps small businesses is to be welcomed and so it is good news for riders — so long as they are following the rules and paying their staff as full-time employees,” she told H&H.

Eventer Francis Whittington, who employs 3 staff full-time, also welcomed the announcement, but questioned whether the benefits might be short-lived.

“Short-term, it’s very good news,” he said. “But the Government can’t afford to make cuts like this without taking from somewhere else. I suspect we will find a hike in the minimum wage to compensate.”

➤ For more information, visit: www.gov.uk

This article was first published in Horse & Hound magazine (27 March 2014)