A new tax clampdown on dog and cat breeders has been welcomed by a senior vet – despite fears that some individual clinicians may also be targeted.

Letters from HMRC are encouraging breeders to make “voluntary disclosures” of income earned from sales and warning that further investigations may follow if they do not.

But while concerns about the campaign’s potential are being voiced online, Richard Hooker, IVC Evidensia’s UK country medical director, believes it could benefit animal welfare – particularly if combined with further action in other areas.

‘Urgent review’

Mr Hooker said: “The regulatory and licensing regime for dog breeders does need urgent review. If authorities and agencies were able to look at all the ways to work collaboratively in a harmonised way, and work together to close existing loopholes, it could have an even greater effect.”

Examples of the new one to many (OTM) letters, which Vet Times has seen, state HMRC has information suggesting the recipient has earned income from the breeding or sale of animals.

They also say recipients must register for self-assessment and complete a tax return if they have gross trading incomes of more than £1,000 after expenses.

Although the agency has been investigating the area for many years, tax experts believe the current process has been triggered by more recent trends.

Significant spike

Paislei Godley, associate director of the Prime Accountants Group in the West Midlands, said: “The pandemic led to a significant hike in breeding as pet ownership spiked, but, ultimately, if people are breeding and selling for trade, they should be declaring it to HMRC.

“In this scenario, they are inviting taxpayers to respond voluntarily. They wouldn’t send the letter if they didn’t have some sort of evidence, so anyone receiving one shouldn’t ignore it.”

More than £5 million in tax was recovered between 2015 and 2019 across 257 separate cases examined by an HMRC taskforce set up to investigate puppy breeding operations.

Obligations

An HMRC spokesperson said: “We take a variety of approaches to ensure all taxpayers are aware of their tax obligations and pay the correct amount of tax at the right time.

“We regularly send letters to educate, remind or prompt people to review their tax affairs – particularly where we have information to suggest there are specific risks to the payment of tax owed.”

While fears about the current process have so far been voiced by individuals who claim to breed only a small number of litters in a year, the earlier probe was launched following talks with welfare groups concerned about unregulated breeding operations.

‘Detrimental effects’

Mr Hooker said: “We fully support any actions by HMRC or other authorities that put pressure on unscrupulous breeders, making unethical breeding practices untenable.

“Illegal and unethical breeding practices can have a significant impact on animal welfare, and we see first-hand in our practices the detrimental effects these breeders have on pets.

“Many animals from unethical breeding environments suffer from severe, long-term health issues, which can cause considerable emotional distress for the pet, owners and our veterinary teams alike.

“Tackling illegal breeders is essential to improving the welfare of these animals and ensuring that responsible breeding standards are upheld.”

The BVA and BVNA both declined to comment on the issue when approached by Vet Times.