Tax Allowable Expenses for Dog Breeders

If a tax demand is received be truthful about the income received from selling the puppies and from stud fees because the 'Breed Record Supplement' is available for their inspection. You can offset this by all or most of the following: -

Cost of Bitch or the estimated value if homebred.
Cost of using the stud dog or equivalent value if homebred.
Vets' fees for the life of the dog & bitch (let the taxman disqualify what may not be applicable)
Cost of pet insurance. (The payment to you from the insurance company must be deducted from the vets' bills.)
Cost of food for life of bitch spread over number of litters.
Cost of food for life of stud dog if you are declaring stud fees.
If the bitch is to have more than one litter apportion the cost of food, cost purchase etc per expected number of litters.
If the stud dog is used several times apportion his costs over the expected number of studs.
Cost of advertising puppies.
Cost of feeding the owners of bitch's who come for studs.
Cost of feeding oneself when travelling to stud dogs for matings.

An estimate of the above is accurate enough until the final total is known. Then explain to taxman who will work out the adjustment needed.

Cost of bedding and kennels/runs, spread across expected life of units divided by number of litters per year.
Cost of repairs to dog accommodation, puppies can be so destructive.
Cost of paint for the inside and outside of the kennels unit.
Charge protective clothing to expenses, such as one pair Wellingtons, waterproof jacket, anorak, etc per year.
Cost of hosepipes and pressure washer, disinfectant, fly papers, etc.
Cost of freezers, fridges to keep and defrost food. Either charge all in one go or spread cost over expected life of unit, ie five years. Don’t forget the extra cost of insuring the units and the frozen food stored in them.
Cost of computer and consumables needed to keep records of shows, wins, studs, litters and costs for tax man.
Cost of show entries, catalogues, refreshments, advertising wins.
Cost of advertising stud dog.
Cost of hiring help when at shows or busy with litters.
Cost of seminars attended and travel expenses.
Cost of heating and lighting room to house computer. (A room has to be set aside to house the show equipment, computer, etc. In a three-bedroomed house allow 1/6th of bills against dog expenses.)
Charge up to 1/3rd of household insurance to cover office room, store room, show equipment and kennels.
Charge half of telephone bills to show expenses.


As you will be taxed as a self-employed person you can claim a wage for yourself. If this is kept below your tax code level there will be no tax or NI on this. If you work already forget this bit.
You need to employ secretarial services to answer the phone when you are not there who has to be paid a wage, this is usually your husband/wife/partner or significant other. If this is kept below their tax code level there will be no tax or NI on this. If they work already forget this bit.
Cost of running motor vehicles, fuel, insurance, tax, service, MOT, repairs, tyres, batteries, parking, tolls etc. Apportion half of costs of first vehicle against profit and a quarter of a second vehicle.
Depreciation of cost of vehicles for transporting to and from shows. Allow half for show use and half for personal use. The tax officer will calculate depreciation for you.
Cost of second vehicle in case the main one breaks down or is off the road. Allow half of this as above.
(Depreciation of vehicles, 20% of initial value each year until written off. Depreciation of computer, 25% of initial cost each year until written off.) Deduct half of depreciation from profit.

If you have a legitimate expense against your show/breeding programme make sure to include these.

Remember to put the dogs in both yours and your partner’s or children’s names so that half the profit can be claimed by them and they will have similar expenses to set against income.

Remember the taxman has to ensure that he only deducts the correct amount of tax and not a penny more; it is your responsibility to highlight all your legitimate expenses.

FOOTNOTE
Most of us have to work to support our hobby so part of your income and the tax on it should be added to the list. It will probably not be allowed but it frightens the hell out of the Tax Inspector.

Ken Humphries
Bengrafton Great Danes 2004

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