Are Proceeds from breeding puppies taxable?
A friend of mine has asked if he should declare the proceeds of sale (£4.5K) of a litter of thoroughbred puppies on his tax return and pay tax on them.
The bitch is a pet. No other dogs are kept. Fortunately (for him) there were no vet fees as his partner is a vet and performed her services for free.
If the proceeds are taxable, I assume that the puppy food will be allowable as an expense. But what about the cost of the bitch and the food and care she has received since being acquired (a few years ago). She would not have been able to produce the puppies if she hadn't been looked after since acquisition!
If the (net) proceeds are taxable is it to be "other income" or "trading income". If the latter should my friend have registered with HMRC and is he now liable to a £100 penalty?
If it is taxable, then there must be a lot of people out there evading tax!
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