Tax-free work clothing

Tax-free work clothing is a relief that is often taken advantage of, particularly by sole traders and partnerships.

 

There are lots of rules governing something which you might believe would be quite straightforward. Here’s Panthera’s guide to tax-free work clothing.

 

Is this something you’d wear day-to-day?

 

If an item of clothing is something you could wear in your day-to-day, non-work existence, then you won’t be able to claim tax relief on it.

 

For example, a farmer may wish to buy something warm and comfortable like a Barbour jacket. However, as helpful as it would be for him or her when farming, the coat could be used in other situations unrelated to work like a night out or going for a walk.

 

If any item of clothing could be used on non-business-related activities, you can’t claim relief on them.

 

Is it a uniform?

 

HMRC’s definition of a uniform is…

 

"a set of clothing of a specialised nature that is recognisable as a uniform and is intended to identify its wearer as having a particular occupation” (HMRC EIM32475)

 

Police uniforms, nurse uniforms, even traffic warden uniforms would qualify under this rule. HMRC’s acid test is whether the person wearing the uniform would be recognised as holding their position on account of that uniform.

 

Does your clothing provide protection?

 

If you think of a building site and the people working on them, you will often see them in yellow fluorescent helmets and sturdy toe-capped boots. Both of those items provide statutory-required protection when at work and are therefore allowable for claims.

 

Everything else is like jeans and shirts are not because, just like with the example of the farmer’s Barbour jacket above, the jeans and shirts can be part of the builder’s day-to-day clothing.

 

What about branded T-shirts, coats, etc?

 

This is a bit of a grey area.

 

If you have gone to the expense of having your workwear heavily branded and it is obvious to anyone passing you on the street who you work for, it may qualify as a uniform. If the branding can be removed, you almost certainly won’t be able to claim for it.

 

Shirts, trousers, coats, and ties with prominent branding will generally be fine however if you heavily brand socks, shoes, or even your smalls, don’t expect a positive reply from HMRC!

 

What about branded T-shirts, coats, etc?

 

Expensive dresses or dinner jackets cannot be claimed back, even if they are being used at an awards ceremony or other high-end business function. In HMRC’s eyes, it’s your choice to turn up in that expensive dress or dinner jackets and that wearing it is not an essential job function.

 

However, if the expensive dress or dinner jacket was a requirement of the role as a waiter (in an example from HMRC), that would be allowable for taxation purposes.

 

Dressed to the nines

 

Want to kit your staff out with a uniform or personalised clothing but want to do it in the most tax-efficient way? Talk by Panthera by calling us on 01235 768 561 or emailing the team at enquiries@pantheraaccounting.co.uk.