Equine industry in the UK: industry profile

The UK equine industry is a substantial component of the country’s economy, contributing approximately £5 billion each year according to British Equestrian. As of 2023 it employed around 230,000 people, and supported approximately 1.82 million regular horse riders across Great Britain.

The industry is highly diverse, spanning professional horse racing, thoroughbred breeding, equestrian sports, leisure riding, and a broad supply chain of ancillary goods and services (feed, tack, veterinary services, farriery, livery yards, etc.).

Britain produces several thousand thoroughbred foals each year and is home to many of the world’s top race meetings, stallions, and bloodlines – factors that make it a global hub for racing and bloodstock. Meanwhile, the wider equestrian sports and leisure segment encompasses activities such as showjumping, dressage, eventing, endurance riding, polo, carriage riding, recreational riding schools and livery yards, and riding for the disabled. This segment of the industry supports a range of prestigious events including the Badminton Horse Trials, Horse of the Year Show, and Polo in the Park, as well as a myriad of local riding clubs and schools.

This profile focuses particularly on the thoroughbred breeding sub-sector, but some consideration is also given to other aspects of the industry. This sub-sector alone contributes over £375 million to the economy and supports 8,000 direct and 13,000 indirect jobs, according to a 2023 economic impact study.

The equine industry’s recent performance has been mixed. It has shown resilience in recovering from the disruption of the COVID-19 pandemic – equestrian participation experienced a resurgence, as did the bloodstock market (particularly at the top end) once live auctions returned to normal. Tattersalls (the UK’s leading bloodstock auctioneers) reported an annual turnover of 424,471,500 guineas in 2024 — its highest ever.

At the same time, the industry has faced headwinds. Factors such as rising costs and labour shortages are putting businesses across the industry under pressure. Below, we discuss the issues and challenges currently faced by industry participants in more detail.

The UK equine industry currently faces significant economic pressures, with rising operational costs being perhaps the most notable. In recent years inflation has sharply increased the prices of feed, bedding, fuel, utilities, and wages, forcing many equine businesses to either raise client fees or scale back services. A 2023 British Equestrian survey found that 77% of livery yard owners had increased their fees, with nearly a third hiking them by at least £20 per month to cover the surging costs. More recently, 81% of equine owners responding to a 2024 National Equine Welfare Council survey reported concerns about ongoing cost pressures, with 39% stating that the situation was affecting their ability to maintain horses.

This issue is compounded by a critical shortage of skilled labour. A 2022 survey by the Racing Foundation found that 53% of permanent job vacancies at thoroughbred studs were hard to fill, a significant increase from 2019. The following year, the British Horseracing Authority stated that the racing and breeding industries faced a shortage of around 2,000 employees. Inadequate staffing levels have led to concerns over the ability of businesses to meet demand; riding establishments, for example, have cited staff shortages as the main cause of capacity issues.

The thoroughbred breeding sub-sector faces a particularly challenging outlook — at least outside of the elite operations. A 2023 PwC report found that the majority of bloodstock breeders operated at a loss, with the average loss per sale having risen consistently since 2014. At the time the report was published, the median loss for a yearling sale had reached £33,000, as breeders continued to struggle with rising costs. Unsurprisingly, this situation has led to a decline in the foal crop. Data from Weatherbys show that the foal crop for 2024 was 7% down on that of 2023, in line with a long-running downward trend. This decline threatens the future of British-bred thoroughbreds, which could result in fewer races and diminishing prestige for UK racing, as well as impacting other competitive disciplines.

Despite these trends, the upper end of the bloodstock market is thriving. Recent years have seen record-breaking sales at auctions, such as the 2024 Tattersalls October Yearling Sale, at which a colt by Wootton Bassett sold for 4,300,000 guineas — a European record for a yearling colt. Such sales reflect strong demand fuelled by deep-pocketed investors (many from abroad). However, this “fewer but higher-value” dynamic does little to alleviate the struggles of breeders outside of the elite tier, and is leading top-quality racehorses to be increasingly concentrated among a small number of very wealthy owners.  

There are some signs that targeted policy interventions could help sustain the industry and relieve some of the pressures outlined above. For example, the Great British Bonus scheme has had success in improving profitability for British-bred fillies, and creative financing solutions such as micro-syndication and risk-sharing arrangements offer promising avenues for improving the financial viability of smaller operators in the thoroughbred breeding sub-sector. Meanwhile, the introduction of workforce development initiatives like the Racing Groom apprenticeship may go some way to addressing staffing challenges.

Sustainability has emerged as a central issue for the UK equine industry in recent years, with landowners and operators facing mounting pressure to demonstrate responsible environmental stewardship. This includes adopting sustainable land management practices, reducing carbon footprints, and conserving biodiversity.

In December 2024 British Equestrian launched an environmental sustainability strategy, with the aim of achieving a 50% reduction in operational emissions by 2030 and reaching net zero by 2040. Additionally, tools like the Thoroughbred Breeders' Association's carbon calculator are intended to help businesses assess and reduce their environmental impact. Businesses which lead in this area may be better positioned for long-term success.

Animal welfare is also a growing focal point, with the treatment of horses in the industry coming under increasing public scrutiny. The concept of "social licence to operate" (SLO) is gaining importance, as the public’s tolerance for perceived welfare issues has diminished. High-profile incidents in horse racing, such as fatalities in events like the Grand National and controversies over the use of whips and medication, have drawn criticism from animal welfare advocates and led to protests at major events. Similarly, in equestrian sports, concerns about over-training, hyperflexion in dressage, and cross-country safety in eventing are being closely examined.

As the results of a recent World Horse Welfare study suggest, maintaining public trust is likely to be vital if the industry is to remain viable in the long-term, and businesses that prioritise animal welfare may gain a competitive edge.

The UK’s racing authorities and equestrian organisations have already taken significant steps to strengthen welfare measures. The creation of the Horse Welfare Board in 2020 marked a pivotal development, with its comprehensive Welfare Strategy titled "A Life Well Lived". In tandem, the Thoroughbred Breeders’ Association has issued its Equine Welfare Guidelines for the Thoroughbred Breeding Sector. Practical measures recently introduced in this area include improvements to jump race courses and tighter whip rules. These proactive efforts aim to engage with the public’s concerns, ensuring that industry remains both ethically sound and economically viable.

Another significant trend in the UK equine industry today is the growing use of technology.

For example, health-monitoring wearable devices for horses have become more widely used in recent years. Companies such as Estride and Polar offer sensors that can monitor a horse’s movement and sound an early alert for lameness, or track vital signs such as heart rate and respiratory rate, aiding in early detection of health issues and optimising training regimens.

There have also been some initial steps towards the integration of AI technology into industry workflows. For instance, Ridesum has integrated AI-powered biomechanics analysis into its platform, offering tools that assess rider posture and movement and provide feedback to enhance riding techniques and horse welfare.

In the breeding sphere, genetic testing is becoming a standard practice, with several companies offering DNA tests that identify genetic traits, verify parentage, screen for hereditary diseases, and more. Weatherbys Scientific, for example, provide a range of testing services which aim to enable breeders to make better informed decisions.

Meanwhile, online marketplaces which provide digital spaces for buying and selling horses are growing in number, and have potential to increase access to equine auctions. Examples include ThoroughBid and Tattersalls Online.

One distinctive feature of the UK equine industry is the use of shared ownership models — particularly in thoroughbred breeding and racing (though they may also be used in other sub-sectors). Such models can broaden access to the industry, allowing enthusiasts to engage without the need for substantial capital investment. They may also serve to spread business risk across multiple investors.

Stallion syndicates are one such model. These arrangements allow multiple breeders to collectively own a stallion, thereby sharing both the financial responsibilities and the breeding rights. Typically, a stallion is divided into forty equal shares, aligning with the number of mares a stallion would traditionally cover in a breeding season. Each shareholder contributes to the stallion's upkeep and, in return, receives one nomination per share annually. This nomination grants the right to breed one mare with the stallion, which the shareholder can use personally or sell on the open market. The syndicate is usually managed by a committee elected by the shareholders.

In the racing sub-sector, too, ownership of racehorses may be shared through the use of syndicates. These are managed and administered by a syndicator, who must register as an owner. The British Horseracing Authority (BHA) regulates these shared ownership structures to ensure transparency and protect the interests of all parties involved. Syndicates must adhere to a specific code of conduct, and in June 2024 the BHA announced the introduction of a new licence for racehorse syndicators.

In recent years, so-called 'micro-share' syndicates have emerged as a new form of shared ownership. These may allow hundreds of co-owners to buy very small shares of horses at a relatively low cost.

The UK tax treatment of the equine industry is complex, meaning that a comprehensive explication of its nuances is impossible here.

That said, some key issues are outlined below. For official information, please refer to relevant HMRC material, such as BIM55700 on stud farms. Third-party guides, such as the Thoroughbred Breeders’ Association's Bloodstock Tax Guide, may also be helpful. In addition, the Library enquiry team have access to premium databases and can search case law in this area.

From a direct taxation perspective, much is dependent on whether a given equine activity is considered to be a taxable trade — as is discussed in BIM55701, for example.

Stud farming (i.e. the occupation of land for the purpose of breeding thoroughbred horses) is generally treated as farming, and is therefore taxable as a trade. This allows for loss relief and access to capital allowances, subject to the usual tests of commerciality (see BIM55725). HMRC may allow extended time for loss-making stud farms to become profitable — up to 11 years in some cases — before restricting relief under “hobby farming” rules.

By contrast, horse racing is not typically regarded as a trade. It is usually treated as a recreational activity, meaning that prize money is not taxable and associated expenses (eg, training fees) are not deductible. However, racing syndicates or ownership operations operated commercially with a view to profit (through significant sponsorship, for instance) may be classified as trading ventures by HMRC — in which case profits become taxable, and losses deductible. In addition, where a breeder races homebred stock to demonstrate breeding value — particularly fillies for future use in a stud — racing activities may be treated as ancillary to the breeding trade.

In light of the above, particular care must be taken to correctly account for any transfers of animals from the stud to the racing stable, or vice versa (see BIM55715). Significantly, moving a horse from breeding to racing can crystallise a taxable profit even without a sale.

There are particular rules and conventions with regard to the direct taxation of stallion syndicates — these are set out in BIM55730. Price Bailey Chartered Accountants have published an article on investing in stallion syndicates which summarises some key considerations in this regard.

Breeders engaged in commercial bloodstock sales can register for VAT and recover input tax (see VBNB56000). HMRC may scrutinise small-scale or loss-making operations but accepts that long lead times are typical in this industry. Price Bailey Chartered Accountants have produced a brief overview of VAT considerations for stallion syndicate members.

Most racehorse owners are not considered to be in business for VAT purposes, but registration is possible via the registration scheme for racehorse owners, provided the activity meets certain criteria. Registration enables VAT recovery on eligible costs.

It must be remembered that VAT registration imposes obligations including output VAT on taxable income and the proper treatment of barter transactions (such as nominations for services).

HMRC has a memorandum of agreement with the Thoroughbred Breeders Association which addresses the VAT treatment of persons involved in breeding, training and dealing in horses used for racing.

The diversity of the industry, as well as the fact that many of its constituent businesses are small and locally-focused, means that any list of notable players will not be fully representative of the wide array of equine concerns in the UK.

That said, some examples of large players are set out below.

• Arena Racing Company — large racecourse group, owning 16 racecourses.
• Cheveley Park Stud — leading thoroughbred breeding and stallion operation located in Newmarket.
• Dodson & Horrell — major UK producer of specialist horse feeds.
• Equi-Trek — top UK manufacturer of horseboxes and trailers.
• Godolphin — global thoroughbred breeding and racing operation with major UK bases.
• Goffs — prominent bloodstock auction house with UK sales.
• Grandstand Media — equestrian event management specialist; organiser of the Horse of the Year Show.
• Harry Hall — British brand for riding gear and insurance.
• The Jockey Club — UK’s largest commercial horse racing organisation, running 15 racecourses.
• Juddmonte — internationally renowned thoroughbred breeding operation with UK studs.
• Tattersalls — Europe’s largest bloodstock auction house, based in Newmarket.
• Weatherbys — administrator of the General Stud Book and provider of various racing and breeding services. 

ICAEW’s Library & Information Service can provide information on UK and Irish participants in the equine industry via its wide range of company information services. For more information, please contact our enquiry team on +44 (0)20 7920 8620 or at library@icaew.com to discuss your requirements.

• British Equestrian
• British Equestrian Trade Association (BETA)
• British Equine Veterinary Association (BEVA)
• British Farriers and Blacksmiths Association (BFBA)
• British Grooms Association
• British Horse Council
• British Horseracing Authority
• Federation of Bloodstock Agents
• Hurlingham Polo Association
• National Trainers Federation (NTF)
• Professional Jockeys Association
• Racecourse Association
• Racehorse Owners Association (ROA)
• Riding for the Disabled Association (RDA)
• Society of Master Saddlers
• Thoroughbred Breeders Association (TBA)