ATT Technical Officer The Association of Taxation Technicians
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Is a dog your best friend or a tax deductible expense?

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Helen Thornley untangles the tax leads for sheep dogs, guard dogs, office dogs, therapy dogs and assistance dogs. 

24th Jan 2020
ATT Technical Officer The Association of Taxation Technicians
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An anonymous questioner on Any Answers asked whether it was permissible for a self-employed individual to claim tax relief on the costs of a therapy dog. This got me thinking about the circumstances in which the self-employed could claim relief for the costs of purchasing and caring for a dog.

Paws for thought

The starting point for deductibility for tax relief is always whether the expense has been incurred wholly and exclusively for the purposes of the business. This is ultimately a question of fact, and the purpose of incurring the expenditure is critical.

If there is some other, non-trade, motive - a dual purpose - then the expenditure has not been incurred wholly and exclusively for the business. However, some tax relief may still be available if a part or portion of the expense can be identified as relating to the trade.

Working dogs

The most obvious situation where the purchase and ongoing care costs of a dog are allowable is the traditional working dog such as a farm dog, or guard dog.

HMRC accepts that guard dogs can be treated as ‘plant’ for capital allowance purposes, which gives relief for the full cost of purchase. The same principle also applies to farm dogs such as sheep dogs.

Where the working dog is an asset used in the business, the ongoing costs of feed and vets bills are allowable and any VAT costs can be recovered if the business is VAT registered.

While some farm dogs are treated as one of the family and are permitted in the farmhouse, it’s usually clear that such treatment is incidental to the active role the dog performs on the farm. If the purpose of acquiring the dog was to perform a valuable role in the business, it follows that all associated doggy-costs should be allowable as deductions.

Incidentally, where farm employees are required to keep a dog or dogs to perform their duties they are entitled to a weekly dog allowance of £7.63 per dog per week which is not subject to tax.

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Replies (5)

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By jonnybennett
24th Jan 2020 10:43

I remember the (no doubt apocryphal) anecdote about the VAT inspector who visited a farm and ran over the sheepdog in his car. He then refused to allow the VAT on the dog food as it couldn't be a business expense anymore as the farmer had no dog.

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By Noham
24th Jan 2020 11:08

I did not know that guard dogs can be treated as plant - and presumably get AIAs. Thank you for the tip.

Does that apply to horses, in particular plough horses and polo ponies (used to teach polo and hired out to polo players).

Where the horses are bought young and then schooled up, is the cost of schooling also plant?

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By [email protected]
16th Sep 2020 09:59

A client has been self employed as a security dog handler and the company she has been working for is now insisting, because of IR35, that she goes on the payroll at the same rate as she was previously charging.
She has previously been putting the dog related expenses through as allowable expenses - can she claim any allowances if she goes under PAYE?
The company are not intending on reimbursing her for any of the costs

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By Tom Povey
17th Oct 2020 12:20

My partner and myself both need to travel from Oxford to Cambridge for company meetings. These may be up to six times a year. We have an old dog and need to pay someone to look after him while we are away. So far this has cost us some £500 this year. If we can't have someone look after him then we cannot both travel and we are both required for the meetings.
Can we claim the cost of dog care as a business expense as it is incurred wholly and exclusively to allow us to travel on business?

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jacob
By Coopergetready
19th Oct 2021 12:18

Thanks for explaining the difference. We have office dogs and therapy dogs. One part of our office is occupied by the school for ADHD kids. But our business manager is having struggles calculating the taxes, because the standards of grooming are higher and the precautions the company is taking.

HW typer to do my calculus homework on tax deduction.

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