Is your dog a business expense? What can you claim?

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Us Brits love our pampered pooches, so much so we take them to work with us. While ‘working’ dogs such as farm dogs, and protection dogs are common place, in 2016 it was reported that around 8% of workplaces allow dogs into the office. With this in mind, would you consider your working dogs as a business expense? As a lot of people are now asking if their pooch can be deducted as a business expense. We have written this article will cover the following points:

  • Claiming expenses for Working Dogs.
  • Claiming expenses for Office Dogs.
  • Claiming expenses for Guard / Protection Dogs.
  • Claiming expenses for Therapy Dogs.

Claiming expenses for Working Dogs

These are you typical working dogs you see in jobs such as farming, search and rescue, police and military. These type of working animals are actually classed as ‘stock or plant’ owned by the business. Therefore, can be claimed as a capital allowance which will allow you to claim full relief for purchasing costs. Feeding and caring for them would be classed as tax-deductible expense including veterinary care. VAT can also be recovered on the costs of feed and vet bills, if the business is VAT registered. Businesses who have working dogs as a business expense can claim a weekly dog allowance of £7.63 per dog per week, which is not subject to tax. That is certainly something to wouff about!

There is very little guidance from HMRC about how to treat different working animals for tax purposes. For example, a cat kept to control mice in a grain store would also be a working animal. Therefore would be treated for tax like a working dog.

Claiming expenses for Office Dogs

While having a dog in the office can be a massive morale boost for staff, HMRC will not class this as a ‘working dog’. Because the dog is most likely to be the bosses pet and being a pet is its primary role,  it would be very difficult to argue that any costs incurred are for the business. HMRC guidance also specifically states that employees who have a dog and are required to travel cannot claim tax relief for any additional kenneling or care fees that they might incur, as the extra costs are occurred as a result of their personal circumstances, not the job itself.

Claiming expenses for Guard / Protection Dog

Very much like a sheep dog for a farmer, certain breeds of dog can be used for work as a protection dog for business owners. The breed must be suitable to use as a guard dog. For example, HMRC question if you put a Chihuahua down as a protection dog. If the dog is likely to live outside mainly and on the business premises HMRC would consider this a working guard dog. You will usually find these working dogs on industrial estates, in yards, and businesses where expensive items are kept outside. The dog will deter potential thieves from attempting to steal items they may deem as easy due to location.

Difficulty comes when the dog is also a family pet. Some may look to apportion costs between work and personal, but this could be difficult to defend with HMRC. You would have to ask yourself the question, would you consider the dog a pet or a working dog which is a business expense?

Claiming expenses for a Therapy Dog

Dogs have always carried the title of ‘mans best friend’ therefore it is no surprise they popularly used as ‘therapy’ for humans. A working therapy dog can be found in places such as hospitals, care homes, schools and much more. There can be large amounts of expenses involved with training a dog to be suitable for this specialised role. Meaning there may be a case here for their expenses to be deducted against your business. Like protection dogs, therapy dogs are usually chosen from a select breed list and this will be taken into consideration by HMRC. If the dog is taken home at the end of a working day, it can be considered incidental, as with other types of working dogs mentioned above.

GET IN TOUCH WITH ONYX

Do you need help with a claim? Our tax team are on hand to help if you have any queries regarding information in this article, or want to discuss further, please give us a call or e-mail us at  enquiries@onyx.accountants for a FREE no obligation consultation.

Our friendly team of tax specialists are happy to help. Just drop us a line!

Call us on 0121 753 5522 or 01902 759 800. We look forward to hearing from you!

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