Many of us buy clothing that, in reality, we only wear for work – and we are often asked if the cost of these clothes can be set against the tax bill.
The short answer is no: HM Revenue & Customs is adamant that such expenditure has a purpose not connected with our work in that we wear clothes to keep us warm and to protect our modesty. Because of this dual purpose, we can’t claim the cost of our work clothes.
Baroness Ann Mallalieu QC confronted HMRC on this issue: she bought clothes to comply with the strict clothing policy of the Bar that she would never wear out of court and felt that the costs were therefore allowable for tax purposes – the court disagreed, and this remains the case today.
However, if you are self-employed and/or an employer, there may be some occasions when the cost is allowable – most obviously if it falls to be classed as protective clothing such as safety boots, overalls, high visibility jackets.
For people working within the healthcare sector this means that the cost of medical tunics and scrubs are allowable.
People in the entertainment sector may also be able to claim a tax allowance for some stage clothes; this will be different for different performers and so specific advice should be taken.
Employers can also provide uniforms for staff – but HMRC does keep an eye on the strict letter of the law:
To be classed as a “uniform” an item of clothing should be “permanently branded.” This means that the employer’s logo should be screen printed, tabbed or sewn onto each and every item of clothing. A removable badge would not make the item a uniform; nor would clothing simply in the corporate colours.
If the clothing is unbranded, then a Benefit in Kind arises, and the employees will be taxed on a proportion of the cost of the clothes to the employer – although in reality this is likely to be negligible. It may also be possible to claim that this is a “Trivial Benefit,” or that it can be covered by a “PAYE Settlement Agreement.”
There is one other matter to be considered – the laundering of uniforms. When an employee has to launder their uniform at their home then there is a small tax allowance available. The amount depends on the sector in which you work, and it is not available if the employer deals with the laundering; this may be the case in the Healthcare Sector.
As ever, we would recommend talking to us for specific advice – in the case of clothing the answer is likely to be “no,” but we may be able to ensure that you fall within the “yes” group by simple tweaks of the arrangements.