If breeding and selling animals has become a reliable income stream, you need to ensure that HM Revenue & Customs (HMRC) is properly informed.
Tax compliance is not just for big businesses, small-scale sellers must also stay within the rules.
When does tax apply?
You can earn up to £1,000 per year from casual sales or self-employment without reporting it.
Once you cross this threshold, you must register for Self-Assessment, declare your income, and pay any tax owed.
What happens if HMRC suspects undeclared income?
HMRC keeps a close eye on unreported earnings.
If they suspect income is being hidden, they may send a One to Many (OTM) letter urging you to review your tax situation.
Ignoring these letters can lead to penalties or a full investigation.
Disclosing undeclared earnings
HMRC’s online disclosure service allows you to come forward and settle unpaid tax.
Once you notify HMRC of your intent to disclose, you’ll have 90 days to provide the necessary details and make your payment.
If HMRC has already contacted you, your disclosure may be considered ‘prompted,’ which can result in higher penalties than if you voluntarily declare income before they reach out.
Registering for Self-Assessment
If your animal sales bring in more than £1,000 per year, you must register for Self-Assessment.
This means filing an annual tax return and declaring all relevant earnings to avoid penalties.
Handling an HMRC letter
Receiving a letter from HMRC can be stressful, but ignoring it will only make things worse.
If HMRC does not receive an adequate response, they may launch a full inquiry, potentially leading to significant penalties or even criminal charges in cases of suspected fraud.
If you’re unsure about your tax obligations or need to address undeclared earnings, now is the time to act.
Selling animals comes with tax responsibilities, and we are here to help.
