Hidden Economy (HE) teams at HMRC have in the past focused on those trades commonly known to be on the sidelines of mainstream tax with opportunity to earn money and hide it from the taxman’s eyes, with even prostitution being targeted for tax recovery!
The HE teams carry out targeted projects into such groups of people with a strong expectation that they have not declared their income and the most recent one being dog (and less commonly cat) breeders.
It is no secret from my vastly increased workload that the insurer Petplan has had to comply with a notice from HMRC to provide details of the breeders on the lists.
Why is this? well Petplan provide purchasers with one free month’s insurance for all puppies sold for example, and in return pay breeders in high street vouchers as form of commission. It is this that renders the insurer liable to declare to HMRC. As a result almost 20,000 breeders details have gone to HMRC who are sifting through it to see if the breeder is shown on their records. Many have had letters which are straight to the point telling them HMRC are aware of their trade and asking for the figures!
Call me on 07584 706664 for a chat to see what your position is likely to be. Many folk will fall below the annual tax free personal allowances and may owe nothing at all, but until you declare it, HMRC will not know. What they do know is your sales figures over a four-year period but the evidence sent to them may have discrepancies. HMRC can go back up to 20 years in serious cases but it can be limited to only 6 dependent on your circumstances. What they are not accepting is the excuse of it being a Hobby!
The Cat is definitely out of the bag but you may not be in the Dog House with the right adviser with inside knowledge!Share