Are you complying with HMRC’s tax rules on animal breeding and sales? 

HM Revenue & Customs (HMRC) is stepping up its scrutiny to ensure that those engaged in the breeding and sale of animals are fulfilling their tax obligations. 

Tax responsibilities for animal breeders 

When your income from these activities exceeds the £1,000 tax-free trading allowance within a tax year, you are required by law to declare this income to HMRC.  

Failing to do so could lead to penalties, especially if you have other taxable income that affects your overall tax liability. 

HMRC’s vigilance  

HMRC is already on the lookout, actively sending letters to individuals suspected of not reporting income from animal breeding and sales.  

If you find such a letter in your post, don’t ignore it. Immediate action is necessary. 

Voluntary disclosure 

Should you realise that you’ve neglected to declare income from previous tax years, HMRC provides an opportunity for voluntary disclosure. 

Upon receiving their letter, you must inform HMRC of your intention to disclose as soon as possible and complete the disclosure process, including paying any owed tax, within 90 days.  

Bear in mind that penalties for prompted disclosures – those made after receiving a letter – can be higher than for unprompted ones.  

Our team is ready to assist you with this process if you need help. 

Self Assessment registration 

If your earnings from breeding and selling animals exceed £1,000 in future tax years, you’ll need to register for Self Assessment.  

This means filing a tax return every year to accurately report all income, including that from animal sales. We’re here to guide you through the registration process if needed. 

Responding to HMRC’s notice 

Ignoring a letter from HMRC or underreporting your income can lead to severe consequences, including heightened scrutiny of your tax affairs, hefty penalties, or even a criminal investigation if deliberate tax evasion is suspected.  

If you’re uncertain about how to respond, we can offer guidance on the appropriate steps to take. 

The Contractual Disclosure Facility 

If you think you’ve committed tax fraud, the Contractual Disclosure Facility (CDF) allows you to come forward.  

Before doing so, it’s wise to consult with our experts to confirm whether fraud has occurred.  

The CDF is designed for those who wish to admit to fraud, requiring you to acknowledge your actions, provide details of all related tax losses, and submit a comprehensive report within 60 days.  

In return, HMRC agrees not to pursue criminal prosecution for the admitted fraud. 

Whether you’re new to breeding and selling animals or have been doing it for years, it’s essential to stay on top of your tax obligations.  

If you need advice or assistance, don’t hesitate to contact us. 

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