EIM50020 - Tax treatment of agricultural workers: Provision of a Dog Allowance

A dog allowance paid by an employer to an agricultural worker is not subject to tax, and does not need to be reported to HMRC, if the following conditions are met;

• The agricultural worker is required by the duties of their employment to keep one or more working dogs, and incurs the costs of doing so, and
• The amounts paid are no more than a reasonable reimbursement of the costs incurred wholly, exclusively and necessarily in keeping the working dog(s)

The amounts that HMRC accepts as reasonable are the maximum amounts specified for this purpose in any of the current Agricultural Wages Orders operating anywhere within the UK.

For the year 2015 until 31 March 2023 the maximum amount specified was £7.63 per week for each working dog, increasing to £9.36 from 1 April 2023.

Any amounts paid in excess of this threshold should be treated as a payment of earnings and subjected to PAYE in the normal manner.