The 2018 Animal Welfare Regulations – more heat than light?

The Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018

New regulations affecting dog breeders in ENGLAND come into force on 1st October 2018. DEFRA has also issued Guidance Notes and various other organisations, including the Kennel Club, have published advice for breeders.

Despite all the information that has been published, there is still some confusion about who requires a Breeder’s Licence. The purpose of this article is to summarise the relevant advice for ordinary dog owners who may also breed and show their dogs.

Who needs a licence?

  1. Anyone breeding 3 or more litters of puppies per year (unless they can show that none of the puppies have been sold)
  2. Anyone breeding puppies and advertising a business of selling them, irrespective of the number of litters produced per year

Who doesn’t need a licence?

  1. Breeders who can provide documentary evidence, if requested, that none of their puppies were sold or that they kept all of the puppies themselves
  2. Breeders that breed a small number of puppies (1 or 2 litters per year) and that sell them without making a profit

The DEFRA Guidance says: In all cases except dog breeding the licensable activity is solely restricted to businesses or those operating on a commercial basis. For dog breeders, a limit on the number of litters is also in place unless it can be proved that none of the puppies from these litters are sold.

Is your breeding activity “a business” (meaning you will need a licence)?

The circumstances which a local authority must take into account in determining whether an activity is being carried out in the course of a business include, for example, whether the operator

(a) makes any sale by, or otherwise carries on, the activity with a view to making a profit, or

(b) earns any commission or fee from the activity and/or advertises a business of selling dogs

These are the 2 tests described in the regulations but they are not the only factors that may be considered. HMRC has “9 badges of trade” which it uses to define whether or not someone is trading (i.e. a business). Some of these are unlikely to be relevant in the case of dog breeders. Those in bold may well be relevant.

  1. Profit seeking motive – did you breed to make money?
  2. Frequency and number of similar transactions – how often do you breed and how many times have you bred?
  3. Modification of the asset in order to make it more saleable
  4. Nature of the asset
  5. Connection with an existing trade – e.g. if you run a boarding kennels as well
  6. Financing arrangements
  7. Length of ownership
  8. The existence of a sales organisation – e.g. if you have a “sales website”
  9. Reason for the acquisition/sale

In some circumstances, the existence of one single badge is enough to show trading. However, in other cases, HMRC will look at a combination of the badges of trade. The trigger to get HMRC interested in the first place is the existence of a profit because you may well have income that is taxable. There is a large body of case law on what amounts to trading and individual cases will be judged on their facts, so keeping records of your income and expenses would be important.

Note that the Government announced in Budget 2016 a new allowance of £1,000 for trading income from April 2017. Anyone falling under this threshold would not need to be considered in the context of determining whether they are a business. The £1000 threshold applies to income, not profits.

So, are you “a business” for the purposes of the regulations?

From the above, there is no black and white answer. It already appears that different local authorities are arriving at different decisions on this aspect. This is not surprising as the guidance specifically says “there will be an element of judgment required”. Unfortunately, that’s not very helpful for most people.

Guidance on “out of scope” activities

DEFRA provides further examples of indicators that a breeder may fall outside the scope of the licencing requirements:

  • The number, frequency and/or volume of sales – irregular transactions, low and/or irregular numbers of adverts/sales or low numbers/values of animals sold are likely to indicate the activity is not commercial in its nature
  • Where an individual can demonstrate the activity is undertaken as a hobby or for education or scientific advancement, and that they are only selling surplus stock, without making a profit. This could be demonstrated by producing evidence such as:(a) Reports or studies prepared by the individual in relation to the species kept, including self-published, published for scientific journals, published in the pet trade or hobby media, or demonstrable contributions to conservation projects.
    • (b) Competition entry forms for the animals kept by the individual.
    • (c) Registered membership of a club or society relevant to the animals kept by the individual

How to get a licence

If you think you need to get a breeding licence, ask your local Authority. There’s usually an online application but you may wish to speak with someone first, to find out if they think you actually do need a licence.

You will then have to meet the conditions set in the regulations (see further reading). The conditions are based on the 5 Animal Needs:

  1. Need for a suitable environment.
  2. Need for a suitable diet.
  3. Need to be able to exhibit normal behaviour patterns (such as exercise)
  4. Need to be housed with, or apart, from other animals.
  5. Need to be protected from pain, suffering, injury and disease.

Advertising your puppies

After October 1st 2018, if you have a breeding licence you must include all of the following within your adverts:

  • Your breeder licence number
  • Name of the local authority that issued you with the licence
  • A clear, recognisable photo of the specific dog you are selling
  • The age of the dog offered for sale
  • The dog’s country of origin and country of residence, which will generally (but not always) be the UK

If you don’t have (or need) a breeding licence, you don’t need to include that information in your adverts.

Further reading:

KC FAQs are here:

https://www.thekennelclub.org.uk/breeding/dog-breeding-regulation/faqs-dog-breeding-regulations-in-england/

The legislation (39 pages) can be found here:

http://www.legislation.gov.uk/uksi/2018/486/pdfs/uksi_20180486_en.pdf

The general conditions for the legislation can be found here:

http://www.legislation.gov.uk/uksi/2018/486/schedule/2/made

Specific conditions on breeding dogs can be found here:

http://www.legislation.gov.uk/uksi/2018/486/schedule/6/made

DEFRA Guidance can be found here:

What licenced breeders must do to advertise their puppies legally:

https://www.pets4homes.co.uk/pet-advice/animal-welfare-act-2018-what-licensed-dog-breeders-must-do-to-legally-advertise-their-litters.html

When is a hobby not a hobby – blog post:

http://www.lindsayhenson.co.uk/hmrc-get-in-via-the-cat-flap-never-mind-the-back-door/

Disclaimer

The information provided here has been taken from published DEFRA Guidance on the Regulations and Gov.uk. We are not local authority licencing inspectors, lawyers nor tax accountants. You should consider your own personal breeding circumstances and take advice, if necessary.

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