VAT ISSUE 44_Jerkins feature.qxd 16/12/2013 13:04 Page 6
OWNER/TRAINER AGREEMENTS Racing Ireland (HRI) for several years to make the agreement a condition of a trainer’s licence. Grassick does know of a few trainers who have asked new owners to sign an agreement, but the general feeling among them is that an owner can refuse and go down the road to another trainer who does not ask for a signed document. Many trainers are not comfortable with the idea of sending an agreement to existing owners. HRI offer an optional agreement to be signed by both parties that is implemented for account payments, according to its chief executive Brian Kavanagh. The document in HRI’s new owner booklet covers the terms and conditions of the training agreement, which it states should include details of basic training fees per horse; additional expenses, such as transport to/from the races or schooling grounds, veterinary expenses, clipping fees and additional supplements; retaining fee for yard jockey or Curragh training fees (if applicable); commission on sale or purchase of a horse; method of invoicing; and most importantly, the policy regarding non-payment of accounts. Previously a trainer tried to recoup money owed to him but was advised to get a court judgment against the owner before the Turf Club would look at getting involved in the dispute. This is a lengthy and costly process that may not have the desired outcome. Owners can also be put on the HRI forfeit list and there are several on this list, some of whom even owe money to HRI. Grassick would like to see agreement across all sectors of the Irish racing industry on a contract, but this is difficult because the Association of Irish Racehorse Owners (AIRO) does not represent the vast majority of owners within Ireland, and neither are all trainers members of the IRTA. According to Aiden Burns, AIRO manager, there has been no desire from his members to change from the informal trust-based agreements, and he does not believe owners would favour a compulsory agreement.
Future Policy HRI are currently working on a new “Horsecard” – similar in size to a credit card – which will afford some protection to trainers. The Horsecard accompanies the horse to the races with its Weatherbys passport. If an owner has an unpaid training bill, the trainer can hold onto the Horsecard when horses go home, with their passports, for a break. According to Kavanagh, HRI have advanced this idea considerably and are currently engaging with the BHA, as the introduction of such a scheme would have to cover both Britain and Ireland due to the single studbook and free movement of horses between the jurisdictions. Owners have previously been able to get a duplicate passport to get around trainers who hold onto a horse’s passport for security, and owners have also been known to send their stock to another trainer after a spell, despite
still owing money to the original trainer. The Horsecard is hoped to remedy this problem, as horses will not be permitted to run without it.
FRANCE There is no official agreement in France provided by France Galop, although the Association des Entraineurs de Galop (ADEG) provides examples of contracts and advises members to have a training agreement with their owners. From there it is up to the individual trainers then to decide whether or not to follow through. Becoming a racehorse owner in France is a more difficult process than in England or Ireland. Prospective owners undergo a thorough approval process by France Galop, which ensures an owner’s financial capacity to maintain a racehorse with stabling and training costs, as published annually by ADEG.
“Becoming a racehorse owner in France is a more difficult process than in England or Ireland. Prospective owners undergo a thorough approval process by France Galop” Owners provide extensive financial details on a form available from France Galop and that is forwarded first to the Ministry of the Interior and then the commissioners of France Galop, with investigations carried out under the central direction of judicial police. Each member of partnerships and syndicates must be approved by France Galop. Proof must be given of all net earned income from the previous year, sent with a cheque to cover filing fees and registration, which costs different amounts for residents and non-residents of France. A prospective owner is required to show a net income of anywhere from €18,000 to €75,000, depending on if they’re seeking sole or syndicate ownership and where the horse is to be trained, whether in Paris or another training centre. If a person is unsuccessful in his or her bid to become an owner, part of the fees are refunded. France Galop have a dedicated department specifically for owners, but it is the trainer with whom owners will have the most dealings. Therefore the association recommends that both parties define beforehand their responsibilities as well as set out basic – which includes stabling, feed, and daily training – and additional training fees. Trainers should advise
owners whether additional costs such as vet and farrier are separate or included in the weekly or monthly price. Late or non-payment of bills by an owner will incur penalties of 1.5% – the statutory interest rate per month of delay – from due date until date of actual payment. This comes under Article 1153 and follows the Civil Code. A trainer can also apply to have an owner put on the defaulters list (liste des oppositions) under Article 82 of the Rules of Racing, and France Galop will withdraw authorisation for an owner’s horses to run. However, according to several trainers, this is a complicated process and does not always work in the trainer’s favour. The pre-checks of owners does nothing to protect trainers from non-payment of fees. According to the French Trainers’ Association, this system wasn’t designed as a protection for trainers. In fact, some trainers believe it may actually be a deterrent to those who might be perfectly acceptable owners but prefer not to share their personal finances with France Galop. Also, these pre-checks that are meant to preserve the integrity of French racing have not prevented owners from defaulting on their training fees. Anecdotally, there are plenty of trainers who have not been paid, and it is a huge problem within the sport. Some owners also withhold payment until a horse wins money on the track. The situation is getting worse due to an increase in VAT rate, from 7% prior to December 2012 and rising to 20% in January 2014. This coupled with the world economic crisis has meant that many trainers have ended up taking ownership of horses, a situation that has been replicated in Britain and Ireland.
GERMANY Unlike France, Germany does not have rigorous checks for owners entering the industry. The only stipulation is that they provide the Direktorium für Vollblutzucht und Rennen (German Racing Authority) with a copy of their passport. There are no official owner/trainer agreements in place although according to Rüdiger Schmanns (pictured), director of racing at the Direktorium, they do have recommended but non-compulsory owner/trainer agreements. Mario Höfer has admitted that only a few trainers have written agreements with their owners. Similar to other parts of Europe, there has been a decrease in ownership in Germany, especially in small- and medium-sized yards, due to the recession. Some but not all owners pay their trainers through their Direktorium accounts. Schmanns has admitted the Direktorium currently has no measures to protect trainers from debts they may be left with, nor are there any plans to review the situation. n
ISSUE 44 TRAINERMAGAZINE.com 57