Equine Tourism in Cumbria
Horse riding and equine tourism is on the increase, particularly in scenic parts of the country such as ours. Recent figures published by the British Horse Society suggest that 4.3 million people in the country are now riders, many of whom look to explore and enjoy the countryside on horseback.
The equine industry contributes considerably to the rural economy and is the second largest financial contributor behind agriculture. It is perhaps, therefore, unsurprising that trekking centres and equestrian bed and breakfasts are becoming more widespread and that many agricultural holdings are also providing livery and associated facilities for horses.
Whilst a livery or equine tourism business may be an interesting and exciting opportunity, starting and running one requires far more than just time and effort. From a financial perspective many livery yards will only break even unless they provide tuition or supplement their income by alternative means. This is due predominantly to the considerable overheads such as insurance, business rates and ever increasing feed costs. Financial viability therefore needs to be carefully considered.
You should also be aware of regulations which cover anything from health and safety to the control of ragwort and from equine passports to the safe disposal of manure.
If you are diversifying from agriculture or you are purchasing an agricultural property with the intention of starting an equine business you may need to apply to your local council for planning permission. From a planning perspective horses are not usually considered agricultural animals and unless farm land is used solely for grazing you may need to apply for permission to change the use of that land. Permission may also be needed for change of use of existing buildings as well as new buildings or works.
There are various tax implications which must be considered when moving away from agricultural use, such as reducing your eligibility for agricultural property relief.
There are several alternatives such as sole trader, a partnership, a limited company or a limited liability partnership. All have their pros and cons. Which is best for you will depend upon a number of factors particularly if you are planning on simply running a livery along side your farming business. If you are already running a livery business consider reviewing your business structure.
Depending on the scale of the business and your personal commitments you may need to employ people to help run the business. You will be obliged by law to provide staff with a contract within the first 2 months of employment, and, if it has been agreed that they will be working more than 48 hours per week, an opt out agreement varying the provisions under the Working Time Regulations 1998 should be signed. Rest periods and paid holiday must also be given. Minimum wage is currently £5.73 for people over the age of 22. Lower rate bands apply for 18 to 21 years olds and 16 and 17 year olds. If you provide accommodation for your staff, this can be offset to count towards minimum pay although the daily allowance is currently only £4.46 per day. Other benefits in kind cannot be offered as part of a package making up minimum wage.
It is important that you agree terms with your customers from the outset and enter into a written agreement, which sets out those terms. This is just as important whether you are involved purely in livery or in an equine tourism business. Obviously, full livery agreements will be more comprehensive than, say, DIY livery or purely grazing but all such agreements are reasonably straightforward and inexpensive to prepare. The agreement should detail the services which are to be provided, the cost to the [customer] of providing those services as well as other matters such as (for example) who is to be responsible for arrangement and payment of emergency veterinary treatment.
Liability and Insurance
As livery yard owners are only too aware from their ever increasing insurance premiums, when you agree to look after a horse you become liable for it. By acting in the course of a business you are accepting liability and responsibility for any horses in your care. You should always ensure that the horse owner has taken out adequate insurance and ask for a copy of the policy. It is compulsory that you take out Occupiers’ Liability Insurance and, if you have any staff, Employer’s Liability Insurance. Public Liability Insurance and Custodial Liability Insurance are recommended as you will also owe a duty of care to your customers and any visitors as well as to their horses. Be aware that your farm insurance will not normally cover your livery business. As a comfort to you, recent case law has taken quite a common sense view of people’s responsibility for their personal safety and seems now to be moving towards yard owners’ interests.
Any non domestic property is potentially liable for business rates. While rate exemptions available for agriculture will not be available for livery businesses you may be eligible for the Small Business Rate Relief. It is worth remembering that new rates will be coming into effect in April 2010 and the figures will be based on the valuation date of 1 April 2008.
There are a number of important issues to consider before you diversify into or start up any new livery or equine business. Rules and regulations will need to be complied with and failure to do so could result in expensive fines or penalties. You will also want to take advantage of any exemptions that may be available to you. Seeking professional assistance and advice should help you through all of these issues and give you a good start for a successful business.
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Published: Tuesday 7th July 2009