The Tax man came this morning, with information from Pet Plan, I am fortunate enough to have an accountant, just letting you know that it is happening, and they are getting there information from the insurance companies, they told me this.
I am not surprised at this, and it will go beyond insurance and onto studs etc. But it has happened here this morning. In the last 3 years we have had five puppies. So with my accounts showing what it has cost to feed, vets bills. I am not at all worried.

Do you think it’s from the free insurance that goes with puppies?

We went through something like this when living overseas.   All of a sudden there was a clamp down on people breeding puppies, whether big time breeders, or just those who, like us, had the occasional litter.   Nightmare!   You do need an imaginative accountant who can make x = 0 in terms of income vs outlay!!

Our Accountant has just bred a litter himself this year, he can not believe how out of pocket he is, he bought the pup from the south and took it to Scotland he has been here there and everywhere for four years keeping all the health tests up to date. If you add all the traveling we do, which he has, and depreciations, stud fee, vets bills Reg with the kennel Club.
The two men mentioned that they can take breeders at random from the pet plan insurance we give to the new owners. That all I can tell you for now. But they had spelt my name wrong, so I would not except anything from them, and they had a massive lot of questions to ask me, I said if they wrote to me, I would pass it on to the accountant, our other business is a ltd company so I have to have a very good accountant for this. But he at least does understand we dog breeders. Anyone need a good chap, I can really recommend him.

Hi.

I was told the council allows up to 3 litters a year. We've had none as of yet. So why is the tax man involved?

Anyone can make a profit on one litter. I was told by someone working in HMRC that expenditure only relates to the actual litter and direct payments relating to health testing. Showing is a hobby and CAN NOT be used as an expenditure towards the litter.

Tax man is involved because any area where someone could be making money that should be taxable can be checked at any time . It maybe there is no tax liability but checking is what they do.iys worth keeping records and receipts so if u are asked for any information u have evidence to help negate any possible liability

Yes I believe showing is not an acceptable "cost" it's your choice to show and not accepted. The tax man has nothing to do with the council either any income is taxable.

When you consider the hours that a litter takes to look after I think you would be surprised.
For self employed people it generally means they cannot work as they usually do and puppies are a 24 hour job for the first few weeks and still so after that albeit a lesser number of hours..
I know they are for me. I accept that the actual hobby of showing is exactly that. A hobby.

So how would one work out time spent whether it's annual leave of time off from being self employed?

I have no idea but I know that if ever I have a litter, I cannot possible do the hours I normally do.
I work from home as a dog groomer and simply stop work for a few weeks altogether and then do a few hours after that.

Regardless of that the hours that anyone has to put into puppies, watching, waiting, feeding, cleaning etc etc the hours to rear a healthy litter of any size is really endless until they have gone.

It has been said even if you have made no profit or even a loss you should still be submitting it to hmrc

I totally agree with tax returns for breeding litters as I think it's a great way to deter BYBs. I know, they,re the ones most likely to avoid it, but they can get caught out too - as many other types of criminal have.

It's an interesting point about whether showing costs should be deductable.  I don't know how it works compared with horses, especially racers, but I'm pretty sure their breeding (& offspring's) value increases depending on how successful they are. 

Sadly, I think with dogs, their value just depends on how fashionable they are

Actually showing can be  viewed as an expense as advertising, it is what adds value to our litters. Just like Car manufacturers show expenses.

I have the HM Revenue & Customs Business Economic Notes 14.mht notes somewhere. (no longer available on-line).

"Operating expenditure and associated costs
Cost of new stock

Stud fees

Food costs

Heating costs

Maintenance to accommodation

Staff wages

Transportation costs - attending shows and so on.
Miscellaneous small equipment and consumables
Sterilising fluids/disinfectants

Bedding - ordinary and special bedding for welping

Printing stationery and advertising

Miscellaneous equipment such as bowls, brushes, towels, bins, collar, leads, and so on.
Fees and subscriptions
Breeding licence fees
Veterinary fees
Show/exhibition or other competition fees
Journals and other breed circulations
Registration fees - Clubs, Societies or Associations, for example, registration of puppy with the Kennel Club.
In considering the level of bona fide business expenditure relating to the establishment, a common problem revolves around the head count of productive animals. That is, animals which are actively used for breeding or showing, or are in any other way essential to and make an active contribution to the establishment.

A substantial number of breeders, especially in the dog world, become very attached to members of their stock and contrary to good business practise may continue to keep and maintain animals that have become non-productive. They, in essence, revert strictly to the status of `pet' rather than a business asset.

Ascertaining the true position appertaining to business stock or private pet, in the majority of cases will not be clear cut and where relevant will require careful consideration of the facts in each individual case."

They also see well aware of the motivations behind breeding compared to some powers that be:

"3. Breeding of pedigree livestock

The word `Pedigree' is used commonly to denote an animal of pure breeding, one that is registered with the appropriate breed society and inferring formal recognition that it has been bred from a line of registered animals.

Breeding arises from two principal and distinct motivations. Competitive or show breeding is concerned with establishing and/or developing and improving pedigree stock. Income from the sale of offspring or other associated activities is welcome but is neither the only or main motivation. On the other hand commercial pedigree breeding is simply a business venture and is concerned with pedigree only so far as it influences the marketability of offspring.

Pedigree breeders go to great lengths to preserve breed lines and generally improve or maintain standards of breed conformation. This attention to conformity at times necessitates the breeder to undertake what to some may be considered as distasteful or heartless. For example, docking of tails, culling of stock that do not meet breed standards.

As the demand for pets has increased, so too has the number of establishments involved in breeding, together with an increase in the activities of existing breeding establishments. Leaving aside the intensive breeding of birds, small animals and so on, it is the commercial exploitation of dogs and to a lesser extent cats, which causes most concern to the serious breeder and caring animal lover.

This is so, for the following reasons:

There may be a lack of control, as the buyer is not vetted to establish, for example, whether a prospective home is suitable, or whether the purchaser will be a responsible pet owner and so on
They feed the impulse buy market and a large majority are sadly abandoned or subject to ill-treatment, or, as in the case of some breeds of dog, are used for illegal sports, such as, badger baiting or dog fighting
There may be over-breeding of stock animals with no regard to their welfare
The quality of animals suffer, as due care is not taken to breed out faults or to ensure any inherent health and genetic defects are not passed on.
Puppy farms

Concern is also felt about the activities of puppy farms which may not be too concerned with where and to whom puppies are sold. It should be explained that puppy farms normally act as an agency or distribution outlet either breeding their own or obtaining their stock of puppies from other breeders. Most pet shops and other commercial sales outlets obtain their puppies from this type of source.

Puppy farms should of course not be confused with bona fide organisations such as the Dog Breeders Association. These type of organisations bring breeder and pet owner together. Prospective owners are normally vetted by the Association or breeders"

I can't believe how you got all that together in such a short space of time, Brainless! Bloody brilliant, however you've done it

That's interesting. Thanks for that Brainless

Saved it tp my computer when the document was shared on champdogs a few years ago.

With such clear awareness of the issues and motivations being known,  why oh why is there so much confusion over dog breeding and welfare.

It's similar to the (lack of) distinction between dangerous dogs and the dangerous breeds act - or whatever it's currently called.
It takes real people with real knowledge to distinguish between them, and, most importantly, clear and cleverly written legislation... And these all cost money

Barbara can you claim for time your spent with the litter in which you lost income if self employed or if you had to take unpaid leave? Surely if you pay someone else for time then you can cover your own losses?

It will be interesting to see if the VAT threshold is lowered as it is being suggested. Then I expect most puppy farmers will be included in the net. In fact even someone who breeds maybe 3 litters a year and produces lets say 20 pups could be caught as well. A puppy nowadays is often £1,000 and more and with bigger breeds having larger litters and selling for more it's quite possibly just around the corner. You only need 3 litters of 7 to produce 21 pups and at £1,000 a pup that could nudge you into the range.
The council and the licensing rules will be the least of the things to think about then !