Self Employed Dog Walker or Dog Sitter? We’ve gone barking mad and put together this tax advice guide just for you. So whether you are just starting out in the Doggy Day Care World or have been Dog Walking for a while now, here is some useful advice to help you understand your responsibilities, how much tax you need to pay and how you to reduce your tax bill.
Direct Line Pet Insurance published a survey in 2015 stating that a successful dog-walker could walk approximately 13 dogs per day and comfortably earn more than the national average salary of £22,000 – proof that a career in Dog Walking or Dog Sitting can be financially as well as emotionally rewarding.
How to Become a Self Employed Dog Walker
If you would like to become a dog walker or dog sitter, then going self employed is the easiest way to get started. When you are self employed you are responsible for your own taxes and national insurance (unlike if you were employed in a job and issued with a payslip each month showing your pay and deductions).
The simplest way to register as Self Employed is to visit the HMRC website and register online. The process can take 10 days to complete upon which HMRC will post you a UTR number (Unique Tax Payers Reference). Keep this safe as you will need this code to file your Self Assessment Tax Return.
Once self employed you must then:
- Set up a bookkeeping system that keeps a record of all your income and expenses, as well as filing all your receipts;
- Complete a Self Assessment Tax Return by 31 January each year summarising your business income and expenses;
- Pay any Tax due by 31 January each year (and payments on account by 31 January and 31 July each year).
Your tax return submitted by 31 January covers the previous tax year (a tax year runs from 6 April to 5 April). So for example, your tax return due by 31 January 2018 details your earnings between 6 April 2016 to 5 April 2017 and this will detail your income from Dog Walking and dog sitting as well as any other earnings you may have (such as from other rental income, bank interest or dividends).
Here is a sample Tax Return and Sample Self Employment Section which would need to be included for Self Assessment. These are samples, you will need to submit your own Tax Return online.
It is also worth noting that if you already complete a Self Assessment Tax Return, for example because you collect rental income or have savings interest, that you need to complete a Form CWF1 to notify HMRC that you have a new form of income you need to report on. Again, you can do this online here and you will need your Unique Tax Payers Reference.
When Should You Register with HMRC as a Self Employed Dog Walker?
You must register with HMRC as self employed as soon as possible after starting work as an Dog Sitter but HMRC rules are that you must register by 5 October in your business’ second tax year.
However if you are newly self employed and expect that your gross income will be less than £1,000 in your first year, you may be entitled to the £1,000 Annual Tax Allowance for traders meaning you don’t need to register and declare your income. Check the criteria to understand your eligibility and whether this allowance is the most tax efficient solution for you here.
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