I have a large breed and only breed one litter every 2-3 years and I have a stud dog who is used fairy regularly. I am self employed as a dog trainer but am closing the business down due to the ressession and I usually put my litters and stud fees through my business account and on my tax return. I have never made a profit by the way! After taking all the costs out of keeping the dogs and showing and working them, I am left with a minus figure! Now I am closing my dog training business, do I still need to keep a business account for my hobby breeding/stud fees? I am not a commercial breeder, so it seems a bit much to have a business account and tax return just for any litters I have and any possible stud fees?

What do other hobby breeders do please? Do you all have seperate business accounts for your litters and stud fees?

Thanks,

If you are filling out a tax return you need to put all incomings and all related outgoings - however now you are unemployed they may not ask you to do a return and unless you have an income above the allowance you should be safe to ignore it. If in doubt about it ask as with tax matters it is always safer to ask and keep the reply safe.

Hmm..

Technically, you should declare all income, and if you recieve in puppy sales more than your yearly personal allowance, then despite it being a hobby and despite you actually not turning a profit, you may be liable to pay tax.

Sooooo.. I would ask for further information from the local tax lot, and if you do have a litter I would keep copies of all reciepts for incomings and outgoings.. just so you can't be caught out.

> Technically, you should declare all income, and if you recieve in puppy sales more than your yearly personal allowance, then despite it being a hobby and
> despite you actually not turning a profit, you may be liable to pay tax.

Yes - if you don't receive a tax return - in theory - you should notify HMRC and ask for one so that you can declare ANY untaxed income - even something like getting paid £10 for doing online surveys .......... :) :) :) Should HMRC catch up with you, you can't plead that you don't fill in a tax return. If you don't receive a tax return it is because HMRC assume that you don't have any untaxed income.

I have run a small holding for many years. At one stage it did turn a profit with the pedigree sheep but recently it makes a loss every year mainly due to less stock,increased maintainence bills and increased need for casual labour. IF I bred a litter of puppies, which I don't, then it would be included on the accounts.
I have spoken to HMRC about this and they insist on my continuing to fill in the tax return. This has resulted in them paying me back tax on the losses. Keep on the right side of HMRC. Fill in your returns and keep all your accounts. Every breeder on here should be doing this.

I have always included litters and stud fees on my tax return and put it through my business account. I will continue to do so without the business account,

thanks,

We recently had a tax inspection for our riding school and livery yard. At the time I was also advertising a forthcoming litter on our website. The tax inspector was particularly interested in the litter of puppies but as they were my own personal ' income' they weren't included in the inspection.
However, our accountant did ask for clarification on when a 'hobby' becomes a taxable benefit...the simple answer is when you turn a profit. However ANY related costs need to be accounted for and that isn't necessarily in the tax year in question therefore if you have a first litter from a two year old bitch you can count any money paid out from the moment you purchased the bitch ( Including the purchase price, feed, vets bills, bedding any insurance etc plus the stud fee, worming, flea treatments, advertising and registration costs, kennel name costs and any veterinary costs incurred in producing the litter)...after that you can obviously only claim costs for the particular tax year.
One word of advice though is the HMRC are VERY thorough.. they will check everything including number of puppies registered against receipts for puppies sold. They are also fully entitled to carry out credit checks and look at interest payments and will work out any income you might have received anywhere...not just on any bank accounts or credit cards you declare!

> They are also fully entitled to carry out credit checks and look at interest payments and will work out any income you might have received anywhere...not just 
>on any bank accounts or credit cards you declare

Yes - I have also known of people being asked to prove how they bought almost every item in the house - things like sofas, videos, televisions etc etc. One person was also caught out when called into the HMRC for an interview. He had just come back from holiday and the inspector commented on his tan and the man replied that he had just come back from ....... (forgotten where). On the profit that he was declaring he couldn't have afforded a holiday !