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The Jockey Club UK Tax Strategy
The Jockey Club is the largest commercial Group in Britain’s second largest spectator sport. It operates 15 of Britain's famous racecourses nationwide, including Aintree, Cheltenham, Epsom Downs and both the Rowley Mile and July Course in Newmarket, as well as other related enterprises amongst other concerns such as the National Stud, Jockey Club Estates, Jockey Club Catering, Jockey Club Live and our charity Racing Welfare.
Our vision is for British horseracing to be the best in the world for many years to come and for the sport to be accessible for millions of people in the UK to enjoy. As an organisation, we are committed to acting with integrity in all our business relationships and this informs our approach to taxation.
Tax compliance and reporting
We are committed to meeting our tax compliance obligations and will seek to apply diligent professional care and judgement in our tax compliance activities. In order to achieve this, we have a well-resourced finance team and work with external advisors as appropriate to provide additional support, ensuring we are kept up-to-date with any legislative changes that may impact these obligations.
Approach to tax planning
Like any other business activity, any action or lack thereof with implications for tax will be considered in light of the potential impact on our reputation. We will not undertake any activities relating to tax, or accept any level of tax risk, that would result in damage to our reputation.
Tax decisions are aligned to business and commercial strategy. We may respond to tax incentives and exemptions where appropriate and in a way that is consistent with HMRC and government policy. As appropriate, we will seek external professional tax advice to ensure we apply these incentives and exemptions legitimately, and if appropriate, we will seek advance clearances with HMRC to ensure we minimise the risk of uncertainty.
Governance and risk management
We understand the importance of having a strong corporate governance framework that ensures the accountability, responsibility and ethical behaviour of The Jockey Club. The board of Stewards and Finance Committee provides oversight in ensuring that tax is considered within the wider context of the business and in how tax risk is managed. Compliance and risk matters, including those concerning taxation, will be included on the agenda at board meetings as appropriate.
The Group Finance Director has oversight and responsibility over The Jockey Club’s approach to tax on a day-to-day basis which includes the identification, prioritisation and monitoring of tax risk across the business, as well as the escalation of tax risk to the board of directors.
The Jockey Club adopts a low risk approach to tax, as with other areas of the business, in line with our established governance and risk framework.
Relationships with Tax Authorities
The Jockey Club is committed to working with HMRC in an open and collaborative manner, much like any other stakeholder of the business. Wherever possible, we will seek to achieve early agreement on issues and we will keep HMRC up to date about any commercial developments and events in our business that may have a tax impact.
We will also seek external advice in respect of any matters of complexity and will work with HMRC to ensure that any differences of opinion in respect of the application of the law are resolved.
This Tax Strategy document
This document meets the requirement for the Group to publish its Tax Strategy as required by section 161 and section 16(2) of Schedule 19 of Finance Act 2016. It is effective for the year ended 31 December 2020 and covers all of The Jockey Club’s UK Group companies.
This Tax Strategy has been developed by the Group Finance Director.
Approved by the Board on 17 December 2020.
The Jockey Club operates under Royal Charter with a mandate to consider and promote the wider interests of the sport of horseracing and a number of adjacent activities such as thoroughbred breeding. This Royal Charter was renewed and updated in 2017 to reflect the Club’s status and role in the sport, as well as the critical responsibilities that it now fulfils as the sport’s largest commercial operator. This follows the transfer of regulatory and governance powers to the British Horseracing Authority in the early 2000s.
The success of The Jockey Club, and therefore the extent to which The Board of Stewards (referred to hereafter as ‘The Board’) have discharged their duties to The Jockey Club are measured against the above mandate. It is only with a successful commercial operating model that the Jockey Club can continue to function effectively and all stakeholder interests are considered in making key decisions around this.
Section 172 of the Companies Act 2006 requires Directors, in the case of the Jockey Club the Board (and by delegation the Executive Management team), to take into consideration the interests of stakeholders and other matters in their decision making. The Board has regard to the interests of the Group’s employees, customers, suppliers and other stakeholders, the impact of its activities on the community, the environment and the Group’s reputation for good business conduct. In this context, acting in good faith and fairly, the Board considers what is most likely to promote the success of the Jockey Club for its members and in accordance with its Charter, in the long term. We explain in this annual report, and below, how the Board engages with stakeholders.
Approach to engagement with stakeholders
Approach to engagement with stakeholders (continued)
Key Board Decisions
During the year, the Board of Stewards made a number of key decisions which are considered to be in the interests of the overall success of The Jockey Club and the wider sport. These decisions have impacts on certain stakeholder groups that have, to the extent considered appropriate by the Board, been reflected in the decision-making process.
Prize Money Executive Contribution
The level of Prize Money contribution we make into our race programme is one of the most material decisions that the Board takes in any year. This impacts on the competitiveness of our business in attracting the best runners at each level of racing to our racecourses, and provides direct and indirect financial support to owners, trainers, jockeys, horsemen and their own employees. We aim to strike a balance between ensuring our leading races and festivals maintain their global status and competitiveness in horse racing, while ensuring that we are supporting all levels of the ownership and breeding industry at both small and large racecourses.
Our decision on Prize Money contribution is traded off against other competing priorities for the Group, such as investments into property infrastructure at our racecourses, which are required to maintain the highest level of sporting and customer experience and safety for racing participants and spectators alike.
In 2019 our Prize Money decision was made in the context of a significant reduction in media rights income that year as a result of LBO closures. We nevertheless made the decision not to adjust Prize Money materially and to maintain contributions at a sustainable level, as the Board considered the views of racing stakeholders, as well as the likely overall economic impact on the industry as a whole. This decision will need to be revisited later in 2020 in light of the impacts of Covid-19 on the business.
Use of Group Property Assets
The Board continuously reviews the best use of Group assets. Where land assets are considered non-sacrosanct, the Board considers development opportunities. Projects at both Sandown Park and Kempton Park were considered during the year. Both projects involve the potential development of Green Belt land and would yield significant capital receipts to fund material developments to various elements of the infrastructure of our racecourses.
In addition to discussions within Racing, extensive consultations with local interest groups have been carried out by management on both projects. The Board took decisions during the year on both projects which it believes fairly took into account local stakeholder needs, but ultimately prioritised the Jockey Club’s mission to act for the long term good of the sport.
In the case of Kempton Park, the decision was to submit alternate planning proposals that would not require a full sale of the Kempton site but would still involve a material capital receipt from redevelopment. These have received a positive reaction throughout the racing industry. In the case of Sandown, a planning application process is in progress.
Approval of 2020 Budget and Five Year Plan
In approving the Annual Group Budget and Five Year Plan, the Board (and the Finance Review Committee) carried out a detailed review of the various commercial drivers and sensitivities in the business, including forecast admissions and hospitality performance and developments in the betting industry which have had negative impacts on the business.
The Board also considered continued investment in our employees, awarding a business-wide wage increase and in signing off specific budgets for training, employee medical and other benefits and a Diversity & Inclusion programme.
The interests of racing stakeholders were also inherent in agreed investment in prize money (above) and other racecourse facilities.
The above considerations were given in the context of ensuring ongoing bank covenant compliance, commitments to the Group’s Defined Benefit Pension Scheme, investment in customer experience and continued capital expenditure.
Some material elements of the Five Year Plan will need to be revisited later in 2020 in light of the impacts of Covid-19 on the business.
Equal opportunity employer
At The Jockey Club, we’re committed to creating an inclusive place to work where everyone feels valued and rewarded fairly as part of one team. This is critical to our success and mission to create a thriving racing industry for the benefit of all.
Creating a diverse and inclusive environment leads to better outcomes for our customers and allows us to more effectively serve their needs. We understand the importance of embracing diversity not only within our workplace but also in the communities where we operate.
We take active steps to educate ourselves on the issues related to diversity, equality and inclusion so that we can continuously improve our practices and make positive change. By upholding these values, we demonstrate our commitment to creating a better future for everyone.
ABOUT THIS REPORT
Pay gaps are the difference in average hourly pay, when comparing different groups of people within an organisation. For example, the gender pay gap compares all women with all men in the organisation. Companies with more than 250 employees must publish their gender pay gap statistics before April 5th every year.
While we recognise that there are many gender identities, for government reporting we have to report on men and women. The purpose of the report is to identify inequalities that might exist between male and female employees pay and to provide a basis for taking positive action where it is needed. It is an important tool for measuring progress towards pay gender equality in The Jockey Club.
HOW DO WE KNOW OUR EMPLOYEES ARE PAID FAIRLY?
This report outlines the differences in average earnings between men and women within our organisation. Pay gaps are different to equal pay. Equal pay looks at how colleagues are paid for doing the same or similar work.
We are committed to monitor pay and carry out reporting to make sure The Jockey Club Racecourses colleagues are paid equally for doing equivalent roles throughout the business, irrespective of how they identify.
According to data collected on April 5th, 2022, and analysed over a 12-month period, the information above illustrates the median and mean hourly gender pay gap among colleagues. A median average is the middle number in a list of numbers, while a mean average is calculated by adding together every relevant number (in this case salaries) and dividing by the total number of numbers used (in this case the number of employees). Our statistics show that the difference between salaries earned by colleagues who identify as males and females is 7% when calculated using the mean average.
Conversely, when applying the median average those who identify as females are paid 17% more than colleagues who identify as male. The mean difference is a result of the total number of males and females in senior executive positions. The higher number of males in these positions skews the average towards a higher value. Meanwhile, the median difference reflects the significant number of women in senior management or managerial roles. It is important to note that these differences do not necessarily indicate gender bias or discrimination. Rather, they are simply a reflection of the current distribution of male and female employees in different positions. However, we strive towards creating a more diverse and inclusive workplace, where individuals of all genders have equal opportunities for career advancement.
One of the contributing factors to our 7% gender pay gap is our emphasis on familyfriendly policies which support colleagues with caring or family responsibilities. We take pride in offering flexible working opportunities to all our colleagues, which is reflected in the number of individuals who choose to work part-time. However, this commitment to family-friendly practices has a significant impact on the mean figures cited here, as we have observed that it is primarily women who opt for part-time work.
Our dedication to supporting colleagues with family commitments is a core value of our organisation. We believe that everyone should have the opportunityto balance their work and personal lives, and we strive to create an inclusive and supportive work environment to enable this. Our flexible working policies allow our colleagues to adjust their schedules to
meet their individual needs, whether that be caring for children or relatives, pursuing further education, or engaging in other personal pursuits.
While we are proud of our family-friendly policies, we recognise that they can have unintended consequences for our gender pay gap. We are committed to addressing this issue and ensuring that all of our colleagues are fairly compensated for their work, regardless of their working arrangements.
We will continue to monitor and evaluate our policies to ensure that they are equitable and inclusive for all. As anticipated, we are still encountering a year-on-year fluctuation in our outcomes due to the regulatory requirements that mandate the incorporation of “casual workers” in our calculations. The quantity of casual workers we engage on the snapshot date varies each year and is determined by which of our racing fixtures occur on April 5th. Our research has revealed that casual workers are primarily male, belong to the lower salary quartile, and are not eligible for bonuses. This explains why the number of casual workers we employ has a significant impact on our annual results.
Further analysis of our gender pay gap, omitting some of these influencing factors, demonstrates a lesser fluctuation in our annual results. We are committed to ensuring our practices and policies are fair to all colleagues, vigorously scrutinise annual salary and performance bonus reviews, and addressing any gaps.
BONUS PAY GAP
We strongly believe that all of our colleagues should have the opportunity to earn a bonus. Our bonus schemes are designed to reward individuals and businesses based on their performance in the previous financial year.
We take pride in the fact that our bonus distribution reflects our commitment to recognising the invaluable contributions of our colleagues to our success. Currently, 78.9% of our female colleagues and 72.6% of our male colleagues receive a bonus. It’s important to note that these figures are subject to change, not only based on performance, but also due to regulations
governing the inclusion of casual workers in our calculations.
We are dedicated to ensuring that our bonus schemes are fair and equitable for all of our colleagues, regardless of gender or any other factor. We believe that by recognising and
rewarding the hard work and dedication of our team, we can continue to achieve great success together.
Lower Middle Quartile
Upper Middle Quartile
Those who identify as female
Those who identify as male
This graph illustrates the distribution of our colleagues across four equal pay quartiles, categorised by binary gender.
Our 2022 results have shown a fluctuation in the percentage of women across all quartiles. This fluctuation is due to the number of casual workers engaged on the snapshot date, which differs from previous reporting years. We would like to confirm that the data reported here is accurate.
This statement is made on behalf of The Jockey Club and relates to The Modern Slavery Act 2015 for our financial year ending 31st December 2022.
The Jockey Club has a zero tolerance approach to modern slavery of any kind within our operations and supply chain. We all have a responsibility to be alert to the risks, however small, in our business and in the wider supply chain. Our colleagues are encouraged to report concerns using our Whistle Blowing policy and management are expected to investigate, and where necessary act upon, these concerns.
Our Business and Supply Chain
The Jockey Club has been at the heart of British Racing for many years and today is the largest commercial group in the sport, comprised of four main operating brands, which between them mean we are involved in virtually all aspects of the British Racing Industry.
We are also unique for a commercial business in that we don’t make profits for shareholders. Instead we invest all profits back into the sport to support its long term health so British racing will continue to be enjoyed by millions for many years to come. The Jockey Club employs over 600 permanent people in various locations across the UK. In addition, there are thousands of temporary workers employed directly or indirectly by our partners and suppliers to service peaks of high demand at major horse racing meetings and other events.
In recent years sustainable and ethical principles have become increasingly important to us which are reflected in our supply chain. Our products and services are predominantly sourced via UK providers. We also have joint ventures with key providers including catering. We expect the joint venture managements to share our intolerance on Modern Slavery and Human Trafficking. E.g. Jockey Club Catering is a joint venture with Compass Group UK, an organisation with an equally strong stance.
Policies & Contractual Controls
Relevant internal policies include Environmental, Health & Safety, Whistleblowing, Equal Opportunities & Dignity at Work, Sustainability Charter, Bullying and Harassment, and Purchasing amongst others and provide a means of raising concerns, and as appropriate redress without fear of reprisal. Our management structure for each site ensures that we can directly implement our policies and procedures, conduct appropriate training and monitor compliance.
The Modern Slavery and Human Trafficking statement is accessible via our Intranet (Racebook).
We draw attention to our Whistleblowing Policy as a way of escalating suspicions. In February 2023, we partnered with Safecall, an independent, anonymous Whistleblowing Hotline and online reporting system, which allows our colleagues to speak up and report concerns to the highest levels, providing an additional route to raise concerns and report wrongdoing.
Supply Chain Due Diligence
Our Group Purchasing Policy requires evidence of a suppliers’ compliance with MSA15. We have had confirmation that our top 80% of suppliers by spend comply with the Act. Our requirement to comply with the Act has been written into our standard terms and conditions as well as larger group contracts meaning that all new suppliers are bound by the requirement as well as capturing current suppliers when they renew their contracts. It has been made clear to all suppliers that any breach of our agreement could result in immediate termination of that contract. We conduct analysis every 6 months to identify any suppliers we have not worked with in the last 24 months, and they are made inactive from our system.
We recognise the importance of effective due diligence in assessing the risk of modern slavery in our operations or supply chains. This is reflected in our commitment to continually seek to improve our existing processes to appropriately manage these risks. We have a central database of all suppliers, which we continue to assess and classify against a risk rating. Based on this risk, we undertake regular reviews of suppliers and undertake additional random audits of higher risk suppliers.
In addition, every worker who is contracted to work for us is paid above the minimum wage, and food is provided for them at their place of work.
Training & Awareness
As part of our mandatory training requirements, colleagues are required to complete a Business Compliance Essentials e-learning module, which includes information on the types of Modern Slavery, and common signs to look out for.
Assessment of Effectiveness in Preventing Modern Slavery
We understand that Modern Slavery risk is not static and will continue to mitigate this risk on an on-going basis.
In addition, we will review and assess the effectiveness of this Statement annually and take appropriate action, if required.
We will shortly be bringing in a new Supply Chain Management system (NetSuite) which will allow us to communicate with suppliers and ensure accuracy throughout the purchasing process. Suppliers will be required to upload relevant documentation and certificates to the system, and will be automatically prompted when their certificates are due to expire. We will also be able to report on this from the system, which will be an extra check in ensuring compliance is maintained at all times.
This statement is made in accordance with Section 54 (1) of the Modern Slavery Act 2015 for the financial year to 31st December 2022.
I confirm that I am in agreement with the information outlined in this Modern Slavery and Human Trafficking Statement.
Group Chief Executive
The Jockey Club
Date: 13th June 2023