Self employed dog walker or dog sitter? We’ve gone barking mad and put together this tax advice help guide just for you. Highlighting some useful tips for those just starting out in the doggy daycare world and answering some of those difficult to find the answer to questions. Read on..
The Four Steps..
- Visit the HMRC website and register as Self Employed
- Keep a list of all business income and expenditure (expenses)
- Complete Self Assessment before 31 Jan each year
- Pay any Tax and National Insurance due (incl. payments on account)
Direct Line Pet Insurance published a survey in 2015 stating that a successful dog-walker would walk approximately 13 dogs per day and can comfortably earn more than the national average salary of £22,000.
First things first, you must register with HMRC for Self Assessment and Class 2 National Insurance. This should be done as soon as possible after starting your business. Once registered you will receive a Unique Taxpayer Reference (UTR) via post – keep this safe as you will need it to complete Self Assessment online.
Dog walkers will typically be paid in cash or via bank transfer and, like any self employed sole trader, it’s important to keep accurate business activity records and be aware of any entitlements or tax relief that you may be eligible for. Doing so will make life easier when the time comes to completing Self Assessment. Incomplete or inaccurate records will demand more time and hike up any accounting costs. Don’t forget that failure to declare all forms of income could result in prosecution and a fine from HMRC. Accurate returns are important as they affect a person’s eligibility and ability to get things like mortgages and other types of credit finance.
As a general rule, business costs are only allowable if they are incurred ‘wholly and exclusively’ for purposes of trade. Expenses must also be supported by a receipt or bank statement. See our list of allowable business expenses for Dog Walkers and sitters below:
- Company website – Having a company website and a social media presence is a great way to position a dog walking business and target dog owners who are too busy or unable to walk their dog themself. A good website should include a clear description of services, a price guide, location and contact details. The cost of setting up, managing and hosting such a website is an allowable expense.
- Business cards – Most dog walkers will meet dog owners while on the job – Catch them while you can and give them a business card, they might need you one day.
- Dog food & Bowls – Our little K9 friends like their food as much as us humans. The cost of feeding them is of course a business expense, even if it’s something which is then passed on to the dog’s owner.
- Dog Leads – Falling under the business equipment category, dog leads are an obvious item that dog walkers and dog sitters will regularly need and use.
- Clothes – Items like walking boots and outdoor clothing will both be necessary for a dog walking champions. While we doubt you’ll be rolling around in the mud too, a little protection from the elements is always a good idea. Savvy investment and one which is a claimable business expense. Dual use items are more complex and should be avoided.
- Mileage – Keeping a log of personal and business mileage is a necessity if you are going to want to forward a successful claim for allowable mileage expense. As of now, HMRC’s mileage rates say that the first 10,000 business miles can be claimed at a rate of 45p per mile and 25p per mile thereafter. The rate covers the cost of fuel, servicing, tax, MOT and depreciation of a vehicle. Parking charges are also allowable, parking fines are not!
- Commercial vehicle – If you are picking up dogs, a van may make your life easier and keep the dogs more secure as well as increase the number of pets you can pick up at a time. Buying a van under these circumstances would mean it was a business asset and meet the criteria for 100% capital allowances in the first year. This means you can claim the full cost of the van against your taxable profit in the year you buy it. You can claim for fuel, insurance and maintenance costs of the van, although this may be adjusted for any private use, along with any branding you may do.