The pandemic saw a huge uptick in puppy demand due to people being at home the majority of the time to train and look after them. It came as no surprise when opportunists took advantage of the situation, creating ‘puppy farms’ and inflating the price of puppies by sometimes four times what they were pre-pandemic.

The compliance team at HMRC is now writing to animal breeders warning them that they suspect they have undeclared profits and tax liability. The letter makes it clear that HMRC knows the individual has not paid the correct tax and if they do not respond to the letter by the stated deadline, HMRC could open an enquiry.