30 August 2024
Do you breed dogs, cats or any pets for sale? HMRC have launched a campaign targeting undeclared income.
Dog and Cat Breeders - Under HMRC’s Scrutiny
HMRC has launched another 'One to Many' letter campaign, this time targeting dog and cat breeders who fail to declare income surpassing the £1,000 tax-free trading allowance.
Selling and breeding cats and dogs, or any animals that generates income often involves a digital footprint. HMRC have many tools at their fingertips to monitor, trace and investigate anyone who is generating an income, especially using on-line platforms. Not knowing that you have to declare income is not a defence and you will be subject to an investigation and penalties.
When Should You Declare Income?
If your gross trading income is £1,000 from all trading/non property* businesses or more in a tax year, it must be declared, considering any additional income sources. Income below this threshold is exempt.
* property income is subject to an additional £1,000 allowance
Handling Undeclared Income
HMRC expects voluntary disclosure within 30 days of receiving a nudge letter. After initial disclosure, you have 90 days to complete the process and pay any outstanding tax.
For those consistently earning over £1,000, HMRC offers an online service to register for self-assessment. Their dedicated team can assist in explaining the details of what information they have received and from which tax year it pertains.
Consequences of Ignoring a Nudge Letter
If you ignore HMRC's nudge letter, they may initiate a check into your tax affairs, potentially leading to higher penalties since they prompted you to disclose.
Is the Letter Genuine?
Be aware of scams requesting personal information under the guise of HMRC. Always verify suspicious communications through Gov.UK or forward them to phishing@hmrc.gov.uk.
How Can Haines Watts Help
We offer support in calculating your tax obligations and verifying the authenticity of any HMRC communications. Our team will guide you through the correct disclosure process and correspond with HMRC on your behalf, ensuring you stay compliant.
Contact us today for expert guidance and support.
