HMRC is contacting individuals who may need to pay tax on income from breeding animals. When should you declare such income, and what should you do if you receive a letter?
If you make money from breeding animals, e.g. dogs where you sell the puppies, you should check whether you may have a tax liability. As a general rule, if you earn over £1,000 from the activity during the tax year, the income should be reported to HMRC. You only need to do this if the total amount of income exceeds £1,000 and it’s your only source of “trading” income – but you would need to declare it in full if you earn other income as a self-employed individual or partner.
You should check whether the activity means you need to register for self-assessment andcomplete a tax return, or non-compliance penalties could apply despite no tax being due. If the income before any expenses is more than £1,000, you will need to declare it.
If you receive a letter, do not ignore it