One question put to me recently was “is it possible to claim a dog as a business expense?” It’s a fairly broad question with lots of variables at play, but it certainly gave me paws for thought. (Excuse the pun!)

First, you would need to be registered as self-employed to claim any tax relief on the costs of buying a dog – and it must perform a valuable role in your business. That partially answers the question.

You can whittle down the number of sectors or types of business this might apply to. The two examples that spring to mind are a farmer who wants to buy a sheepdog, or the owner of a mental health practice thinking of purchasing a therapy dog to help with clients’ problems.

If your business involves caring for a dog, it’s not unreasonable to assume you can reclaim the costs of buying and caring for it. Let’s focus on Jasper – a fictional guy who guards celebrities in London and uses his Alsatian, Sonny, for that purpose. Would that qualify as a business expense?

Calculating deductibility

Much like any other business expenses, the starting point for seeing if Sonny qualifies for tax relief is to determine whether or not the cost of buying him was “wholly and exclusively” incurred for use in the business.

HMRC has been known to view guard dogs, particularly those who guard a business from home, as pets and therefore the cost of purchasing and feeding Sonny is either not allowable or even partially allowable for tax.

If Sonny isn’t Jasper’s pet, he will be treated just like any other working dog and therefore would be eligible for capital allowances on both the cost of buying and feeding him. These would be tax-deductible expenses.

HMRC also accepts that a guard dog like Sonny can be treated as ‘plant’ for capital allowance purposes, providing relief for the total cost of buying him. That’s because the ‘working dog’ is an asset in Jasper’s business.

Grey areas

Now, if Sonny was a Sausage Dog instead of an Alsatian, he would be unlikely to receive HMRC’s approval. You can understand why: a Dachshund wouldn’t scare off a crazed fan in the same way a German Shepherd can.

It might also be possible to claim a slice of Sonny’s food, vet fees, insurance etc as business costs if he carries out some guard dog duties and is also Jasper’s pet. There’s a dual-purpose element here.

That can be quite difficult to prove apportionment of costs when it comes to keeping a dog. It’s not like you can track the business and private miles in the same way as a company car.

Get in touch

If you’re self-employed and thinking about buying a dog on the business, give me a call on 07803 782100 or email me at jon@red76tax.com to understand what I can and cannot reclaim in relief to reduce your tax bill.