The basic offence may be section 5(1)(b) Public Order Act 1986. The offence is committed if the person:
"displays any writing, sign or other visible representation which is threatening or abusive"
"within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby"
The racial aggravation element is at 31(1)(c) Crime and Disorder Act 1998, read in conjunction with section 28(1)(a). "An offence is racially aggravated for the purposes" of section 31 if "at the time of committing the offence, or immediately before or after doing so, the offender demonstrates towards the victim of the offence hostility based on the victim’s membership (or presumed membership) of a racial group".
Racially-aggravated public order offences, section 31 Crime and Disorder Act 1998, specifically 31(1)(c):
(1) A person is guilty of an offence under this section if he commits—
...
(c) an offence under section 5 of that Act (harassment, alarm or distress),
which is racially aggravated for the purposes of this section.
...
(7) For the purposes of subsection (1)(c) above, section 28(1)(a) above shall have effect as if the person likely to be caused harassment, alarm or distress were the victim of the offence.
See Meaning of “racially aggravated”, section 28 Crime and Disorder Act 1998:
(1) An offence is racially aggravated for the purposes of sections 29 to 32 below if—
(a) at the time of committing the offence, or immediately before or after doing so, the offender demonstrates towards the victim of the offence hostility based on the victim’s membership (or presumed membership) of a racial group; or
(b) the offence is motivated (wholly or partly) by hostility towards members of a racial group based on their membership of that group.
(2) In subsection (1)(a) above—
“membership”, in relation to a racial group, includes association with members of that group;
“presumed” means presumed by the offender.
(3) It is immaterial for the purposes of paragraph (a) or (b) of subsection (1) above whether or not the offender’s hostility is also based, to any extent, on—
(a) the fact or presumption that any person or group of persons belongs to any religious group; or
(b) any other factor not mentioned in that paragraph.
(4) In this section “racial group” means a group of persons defined by reference to race, colour, nationality (including citizenship) or ethnic or national origins.
"Racially or religiously aggravated section 5 is a summary only, non-imprisonable offence and the maximum penalty is a level 4 fine" (CPS guidance on Racially/Religiously Aggravated Offences) - if it were not racially or religiously aggravated it would be a level 3 fine. At the time of writing, a level 4 fine is up to £2,500 and a level 3 fine is up to £1,000 (Sentencing Council, Maximum fines).
Harassment, alarm or distress, section 5 Public Order Act 1986:
(1) A person is guilty of an offence if he—
(a) uses threatening [F1or abusive] words or behaviour, or disorderly behaviour, or
(b) displays any writing, sign or other visible representation which is threatening or abusive,
within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby.
(2) An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the writing, sign or other visible representation is displayed, by a person inside a dwelling and the other person is also inside that or another dwelling.
(3) It is a defence for the accused to prove—
(a) that he had no reason to believe that there was any person within hearing or sight who was likely to be caused harassment, alarm or distress, or
(b) that he was inside a dwelling and had no reason to believe that the words or behaviour used, or the writing, sign or other visible representation displayed, would be heard or seen by a person outside that or any other dwelling, or
(c) that his conduct was reasonable.
