I have been catching up on some posts on here and have also heard a few people mention the inland revenue lately, I wondered those of you who send litter details to the IR are you registered as a business or as self-employed ?  can you offset trial/show costs etc I am not sure how to go about this, we have the odd litter and keep a pup for working/trialling and I am not sure how to go about the IR route as I would be keen to keep everything in the right

Thanks in advance,

Strictly speaking, you are self-employed (would have to be doing it full-time almost to bother registering as a business). You should just declare your gross earnings (full sale price of the puppies) and then your expenses and then any net profit or loss on your Self Assessment Form :) :) I am no tax expert, but if you are only having the odd litter, I can't imagine that they would let you deduct all your showing expenses - I would imagine that they would say that is the cost of your hobby. Deductions have to be reasonable, so would have thought that they would only allow directly attributable costs ie vets bills, food for pups and mum, Xrays etc etc. :)

Daisy

look on here:

http://www.hmrc.gov.uk/bens/ben14.htm#a

This should answer a lot of your concerns and questions.

Thanks very much, no we don't do this full time, and only take litters when we need a pup/pups for ourselves, and normally keep at least 2 back to run on etc for field trials. The rest are sold, but hardly ever the need for advertising, and we rarely make any more than the costs we have outlaid so I know we don't make profit to be taxed on :rolleyes: The IR has always been a big black hole, and one I felt we should consider to keep ourselves right, so I guess I would need to be registered and keep receipts etc for costs ?

When I did my business training for self-employment I was told to keep all receipts and then get advice from my local small business manager at the IR as to which were acceptable as expenses.  Basically anything over your personal allowance - with the exception of Rent a Room Relief (in some cases) is income and can be taxed.  As a hobby you are still only allowed a certain amount of income before you declare it (you would have to check what that is now).

There are two sides to the coin i.e. if you are breeding commercially (you are making a profit which can be taxed) you can set a lot of your receipts against your income.  If you are a hobby breeder i.e. your dogs are classed as pets, you would not be expected to put a lot of your receipts like show entry costs against the profit from a litter but you could put the cost of food, vets bills (to do with the birth) whelping box etc as you had to buy these for your litter.

You don't need to advertise your litters for the IR to find out about them so keep your receipts anyway and if necessary you can produce them to prove expenditure.

A number of people at our local shows have been contacted by the IR to prove or disprove their income.

What I would say is our local IR is very sympathetic and will explain what you need to do.  If you are breeding enough to make a profit taken into account your income from paid work also you could be asked to produce receipts etc.

> As a hobby you are still only allowed a certain amount of income before you declare it (you would have to check what that is now).

I don't think that you are 'allowed' any income as a hobby :D ALL income (profit) is taxable - as long as you have other income using your personal allowances :) I  very much doubt that the IR is going to be worried about very small amounts of profit made by selling the occasional litter, particularly if you have not even counted your day to day showing/grooming/ costs etc. The people who they will be interested in is those who have several litters a year - far more (IMO anyway :D) to count as just a hobby and to provide a pup to show/continue a line :) :)

Daisy

There was an article, which someone typed out on ehre that showed just how much could be offset , shihch showed that anyone breeding an odd litter would no way have enough to be taxed.

Thanks everyone so far for the replies, it certainly makes interesting reading, I don't have all my receipts from last year, except for food deliveries, and vet bills etc, and totalled up the money from pups, and deducted the costs for the year and shows we make a huge loss :rolleyes: just as we had expected, so we don't make any income at all. Will definately start keeping tabs on receipts etc from now on as this has made me think.

Thanks again

Nicola

The difference between hobby and business is not so clearly defined and can be different in every circumstance.  Here is a little for instance http://www.hmrc.gov.uk/manuals/bimmanual/BIM75710.htm What you have to think about, if you read the page and follow the explanatory click links I think you will see what I am getting at.  If your breeding is a hobby, presumably it is from your pets and you would never hope to make much of a profit, but the profit you do make is taxable and there is no way round it.

When you start to add all the other things into your costs which are not related to actually producing a litter then you are looking at it more from a business point of view and then it is debatable whether you are producing puppies as a business or a hobby.  

I have only produced two litters in recent years, and haven't had any for 20 years previous to that but I can be sure I will be asked about it because I also have a business which is totally separate from the dogs.  I would not be claiming my puppies as a business but as a hobby and that limits my expenses to the actual whelping, vets bills and feeding of the litter and mum.  If I were breeding 3 times a year for instance I would expect to put my showing, grooming, purchase of animals, stud fee, hip scoring and cost for the actual whelping and anything else I could think of against my profit from a litter and in the event that I made a loss I would carry it forward to the next year to set against my income for the following year.

I think the whole thing needs looking at again to be fairer to people who do only produce the odd litter.  The IR seems set on tapping every reservoir of income it can think of.

Apologies to Daisy, I was getting my NI mixed up with my SE there is no allowance other than your personal allowance.