Warning that many trainers could be put out of business as British racing examines budget announcement

Many trainers will be unable to sustain the cost increases they will face as a result of Wednesday's budget and will be lost to the sport, British racing has been told.

National Trainers Federation chief executive Paul Johnson's warning was echoed by the BHA which said the extra costs on small businesses already facing financial headwinds risked causing "significant damage to Britain's rural and racing communities".

Businesses across racing have begun poring over the details of chancellor of the exchequer Rachel Reeves's statement, which is set to raise £40 billion in taxes as she set out to plug a £22bn "black hole" in the nation's finances.

Employers will face a major increase in the amount they pay in National Insurance contributions (NICs), with the rate increasing by 1.2 percentage points to 15 per cent, while the threshold at which they start making contributions will fall to £5,000 from £9,100.

Also among the measures announced in Labour's first budget since 2010 was an expected increase in the national living wage of 6.7 per cent to £12.21 per hour, while the minimum wage for 18-20-year-olds will increase by 16.3 per cent to £10 an hour.

However, bookmakers have escaped an increase in gambling duties, leading to a rise in the share prices of listed operators. Johnson described that decision as an "upside" of the budget, saying that a tax hike in that area could have had a "crippling impact on income".

However, he added: "We are still exploring all of the impacts on trainers but it is apparent that this is a budget that will put significant further pressure on the small and medium-sized businesses that typically make up the sector.  We will see significant increases in staffing costs as a result of increasing national minimum wage and employer National Insurance contributions."

• Comment: It could have been worse - but the budget heaps more pressure on British racing's leadership

Johnson also pointed to changes in business rates as another increased burden for his members and said: "Many training businesses will be unable to sustain these cost increases and I believe that we will continue to see reductions in their number, mostly in rural areas, in the coming years."

Trainers' concerns were echoed by Racecourse Association chief executive David Armstrong. He said: "I’m pleased there were no nasty surprises but the combination of NI changes and increased minimum wage along with potential net increases in business rates are a tough pill for racecourses to swallow. The impact on employment levels and prize-money will play out over the months ahead."

BHA director of communications and corporate affairs Greg Swift said there was concern about what appeared to be an increase in business rates for some racing businesses in 2025-26, while the governing body would work with stakeholders to understand the implications of changes in inheritance tax rules as well as the potential impact that the increase in employer NI contributions might have on the racing industry. 

"Combined with the lowering of the level at which employers are required to make NICs payments it is reasonable to assume that this will affect hundreds of racing businesses across Britain," Swift said.

"With the economic headwinds currently being experienced by British racing, these extra costs on small businesses already operating on tight margins risk causing significant damage to Britain's rural and racing communities."

He added: "In order to protect tens of thousands of jobs and meaningfully support Britain’s second most-watched sport, British racing again calls on the government to urgently reform the horserace betting levy and address the impact of affordability checks on racing.”

Bookmakers' fears of a major hike in betting duties did not materialiseCredit: John Grossick (racingpost.com/photos)

Gambling operator shares prices rose sharply on Wednesday as the sector escaped tax rises.

There had been speculation that the Treasury was considering proposals for a major hike in the rate of general betting duty and remote gaming duty, reports which wiped £3bn from gambling stocks this month, but Reeves did not address the issue in her statement.

As a result shares in Flutter Entertainment ended the day up 5.62 per cent to 18,140p, Entain's share price rose by 8.64 per cent to 774.8p and William Hill owner Evoke's shares were up by 11.8 per cent to 59.2p.

Betting and Gaming Council chief executive Grainne Hurst welcomed the budget and the decision not to increase gambling duties.

She said: “We have been clear, any duty rises now would have hit customers, prevented growth, risked jobs and bolstered the unsafe, unregulated gambling black market."

Analyst David Brohan of stockbrokers Goodbody described the budget as a "positive outcome" for the gambling industry.

He added: "The sector will now have time to fully absorb the impact of regulatory changes from the UK white paper, and while the direction of travel longer term may still be for higher taxes, the near term earnings risk has subsided."

The documents accompanying the budget did contain a pledge to consult next year on proposals to bring remote gambling into a single tax, rather than taxing it through a three-tax structure which the government said would "aim to simplify, future-proof and close loopholes in the system". A similar promise had been contained in last year's Conservative government budget.

Swift said the Treasury's decision not to increase gambling duties was welcome "given the potential impact on racing's finances and its workforce", adding the BHA would work with the government on the consultation "to ensure that racing's position is fully understood".

The key points for racing from the budget

Gambling duties

• Pre-budget reports of a major hike in gambling duties failed to materialise with no mention in the budget speech. The accompanying documents did contain a pledge to consult next year on proposals to bring remote gambling into a single tax, rather than taxing it through a three-tax structure which the government said would "aim to simplify, future-proof and close loopholes in the system".

National Insurance

• Businesses across racing will have to bear a significant extra cost with employers facing a major increase in the amount they pay in National Insurance. The rate has been increased by 1.2 percentage points to 15 per cent, while the threshold at which employer contributions start falls to £5,000 from £9,100. 

Minimum wage

• Another increased cost to many businesses, including racecourses, with the national living wage raised by 6.7 per cent to £12.21 per hour. The minimum wage for those aged 18 to 20 will increase by 16.3 per cent to £10 an hour.

Business rates

• Changes to rates relief for the retail, hospitality and leisure industry will also hit finances in 2025 as they will fall to 40 per cent from 75 per cent, albeit there is a commitment to permanently lower the multiplier from 2026.

Inheritance tax

• The concern of breeders over changes to the agricultural property relief was realised, with an effective tax rate of 20 per cent being levied on properties worth more than £1 million from April 2026.

Fuel duty

• Welcome news – and slightly unexpected – with fuel duty frozen next year and the 5p cut made in 2022 remaining for another year.

Read these next:

It could have been worse - but the budget heaps more pressure on British racing's leadership 

Culture secretary Lisa Nandy plays down tax rise reports and talks up horseracing industry 

Sign up to receive On The Nose, our essential daily newsletter, from the Racing Post. Your unmissable morning feed, direct to your email inbox every morning.