prize money payment issue 33_Jerkins feature.qxd 03/03/2011 11:41 Page 2
PRIZE MONEY PAYMENT
Racing has become increasingly international and most racecourses now expect to see a foreign raider contesting at least one of the prizes on their programme. For owners, it’s often an opportunity to chase black type and better prize money, but how much better is the prize money if they don’t go into the race prepared? By Lissa Oliver
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UROPEAN racing authorities are doing their utmost to unify the prize money payment system and most, such as Weatherbys, Horse Racing Ireland (HRI), and France Galop, work together on a reciprocal payment system to make the transfer of prize money as straightforward as possible. The problems arise when additional costs are imposed, not by the racing authority, but by that country’s government itself. Withholding Tax, which is increasingly catching owners unaware, is totally out of the hands of racing authorities and beyond the scope of unification. If a person is deemed to have earned money, including prize money, in Germany, for example, they are liable for the income tax. Owners winning money in Italy are liable to a 4% Withholding Tax, while recipients of German prize money will find themselves liable for up to 26% Withholding Tax. Both of these countries’ taxes can be simply avoided by completing the necessary forms beforehand, as the EU rules that if you have paid tax in one European country you do not have to pay it in another. Unfortunately, it is not until a month later, when the money itself finally lands in an owner’s account, does the owner discover a large chunk missing. By then, it is difficult, to say the least, to apply for a refund. As Linda Corn of Weatherbys, UK, explains, “We have a Withholding Tax Exempt Form, which can be filled in beforehand. It is very simple to do beforehand, but much harder to claim back the tax stopped afterwards. We would recommend all owners to fill in this form prior to running their horse abroad. Owners should make themselves aware of the conditions before they go abroad. It is often very easy to pick up good prize money abroad, but they forget you take off 20% tax and then have to pay the trainer and yard percentages.” Elaine Simpson, Accounts Department of Mark Johnston Racing Ltd., elaborates further when she says, “In Germany there is a Withholding Tax and our owners were asked to complete a certificate declaring exemption for horse racing prizes under the Double Taxation Convention between Germany and the UK. This certificate had to be stamped by the owner’s local Her Majesty’s Revenue & Customs office, a very time-consuming process, which did deter some owners from wanting to race their horses in Germany. Weatherbys advised us on the procedure and provided us with the certificates, which, once completed, we returned to Weatherbys.” It may sound like a tricky procedure, but once completed it is definitely a very valuable document to have. The absence of large chunks of prize money doesn’t end
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