Self Employed Pet Sitter? Here is our tax advice guide just for you. Whether you are starting out or just want to understand more about allowable expenses, here are some useful tips specifically for self employed pet sitters.
Register with HMRC as a Self Employed Pet Sitter
Whether you want to look after dogs, cats, rabbits or goldfish the simplest way to kick start your career as a pet sitter is going self employed.
First of all you must let HMRC know that you are self employed and you can do that online here. Once this process is completed HMRC will send you a UTR number (Unique Tax Payers Reference). Keep this safe as you will need this code to file your Self Assessment Tax Return.
As you are self employed you are required to pay tax under Self Assessment which means you need to submit a personal Tax Return by 31 January each year detailing your trading income, the income tax and Class 2 & Class 4 National Insurance due as well as making a payment for the tax and NI due. Your tax return submitted by 31 January covers the previous tax year for example: your tax return due on 31 January 2018 details your trading income earned between 6 April 2016 to 5 April 2017.
Watch out, you are also required to make a payment on account to HMRC by 31 July each year too which is normally 50% of your previous years tax bill, so make sure you budget for this additional payment too.
Your trading income, somewhat deceivingly, actually means your trading profits (all your income less all your allowable business expenses). Generally speaking, business expenses are only tax allowable if they are ‘wholly, necessarily and exclusively’ incurred in the performance of your business. All expenses must be supported by a receipt, so make sure you keep hold of all your paper or emailed receipts. But it is really important to be aware of which expenses are allowable because they will reduce your tax bill and incorrect claims can result in penalties.
Allowable Start Up Expenses for Self Employed Pet Sitter
Starting any business usually involves some element of cost so it is worth understanding whether these expenses will attract tax relief before you start spending. Here is a list of typically allowable start up expenses relevant if you are a self employed pet sitter:
Even though you are pet sitting at home, you may need to buy some additional equipment to cater for pets staying in your home. You may need spare crates, food bowls, leads, treats or storage units for hamster cages. This additional pet sitting equipment will more than likely be fully tax allowable or attract Annual Investment Allowance, which is another way of making tax savings. So keep all the receipts for everything you buy so you can discuss deductions with your accountant.
Computer & Printer
You may need a computer or iPad to take bookings, research, learn or share photos and videos with pet owners missing their loved one. You may need a printer to produce flyers to win new work. Your Computer & Printer will attract tax relief either in full or as a proportion as an allowable expense or under the Annual Investment Allowance rules for business use.
A website is almost like a marketing brochure now and gives you a chance to tell potential customers what services you offer, show real life photos, detail your rates and give a feel for your personality and experience. If you are considering investing in a website then it is worth noting that the website, domain and hosting again are all allowable expenses.
Allowable Ongoing Expenses for Self Employed Pet Sitter
Once you have begun finding clients you will being to incur expenses on an ongoing basis as you run your business. Here are some of the ongoing expenses you which you should look out for as a self employed pet sitter and keep details of as they are generally tax allowable and reduce your tax bill:
Phone & Internet
The cost of a business phone (landline or mobile) and internet is an allowable expense, however if there is personal use then only a proportion of the costs relating to your business can be claimed.
If you have a ‘uniform’ with your branding that you wear while you walk dogs for example, then you should be able to claim for this cost. There are also some circumstances where you can also claim the cost of some basic outdoor clothing if you are out walking dogs such as rain coat and wellies. Normal clothing is not allowed and unfortunately the cost of washing your clothes at home is not either.
Picking up and dropping off pets to their owners may be part of your services you offer as a pet sitter. If so, keep a note of the mileage you travel. Record your miles to and from your destination since you can claim 45p for the first 10,000 miles of driving and 25p thereafter.
Use of Home
There are rules that will allow you to claim an amount for the running costs of being a self employed pet sitter from your home as a portion of your household bills such as gas, water, electricity or rent. Make sure you have an idea of your household running costs to discuss with your accountant at tax return time as they will help you work out how much you can claim against your taxable income.
Pet Sitter Insurance
If you have taken out an insurance policy to cover loss, damage negligence etc you will be able to claim this cost as an allowable expense.
Treats, Pet Food and Toys
You need to keep your house guests fed and watered, so keep your receipts for any of these costs so you can support your claim for ta relief.
Any marketing you do, flyers, business cards or paid ads are also fully allowable expenses so make sure you download your receipts ready for tax time.
Accounting & Bookkeeping
Keeping accurate business records will help to avoid missing any entitlements or tax relief that you may be eligible for. Using a cloud based accounting software such as Xero, Quickbooks or Sage will make life easier, so if you do choose to sign up the cost of the monthly subscription is fully tax allowable. Then, if you choose to use an accountant to complete your self assessment tax return, again their fees will be an allowable expense.It is worth noting that keeping your business records in order will help keep your accounting fees at a minimum.
It is advisable to open a business bank account and keep your business and personal expenditure separate. The bank charges you pay on your business bank account will be treated as an allowable expense.