George was recently admiring the newly branded work-wear that one of his golfing buddies was sporting. A colourful, emblazoned logo stretched majestically over Eddie the Electrician’s hoodie, polo shorts, and even his waterproof outerwear. Eddie even mentioned that he gets tax relief on the clothing, since it was for work.
Before long George was going around telling everyone at the pub that it’s ridiculously easy to get tax relief on clothes. ‘Just make sure you tell them its for work,’ he said with a wink.
Unfortunately, things are not always as simple as George says they are. It turns out that not all work clothes are tax deductible. And it certainly isn’t as easy as just putting your weekend outfit or new jeans down as ‘work clothes.’
The purpose of clothing
In fact, the issue of tax relief on work clothes has always been a hot topic and there’s been plenty of media attention surrounding this subject. One of the most famous cases is Mallalieu v Drummond , when a junior female barrister made a claim for the ‘maintenance, cleaning, and replacement of clothing,’ which amounted to £564 a year. The claim was disallowed on the basis that the particular (unbranded) clothes had a duality of purpose, as they were worn for court but also enabled her to be warmly and decently clothed. As a result, they failed the business test of being wholly and exclusively related to her work or occupation.
The impact of branding
This, in part, is also because her clothing wasn’t branded. In Eddie the Electrician’s case, his branded clothing is tax deductible because it constitutes a uniform. HMRC define a uniform as ‘a set of clothing of a specialised nature that is recognisable as a uniform to identify its wearer as having a particular occupation.’ If Eddie had ‘Sparks Electrical’ all over his clothes that would constitute a branded uniform and would make him eligible for tax relief. Eddie also gets bonus points because his logos are stitched on – if they were detachable, the tax man would almost certainly kick up a fuss if it ever came to an audit.
What to do?
Once again, George seems to be slightly off the mark. His ‘fool-proof’ way to get tax relief on pants seems to have more than a few holes in it. If your job involved walking around in only a pair of logo-covered pants, then yes, you could technically get tax relief on your pants…But for the majority of people, sewing a work logo into your Calvin Klein or Dolce & Gabbana pants will not really cut the mustard.
If you want to play it safe, make sure that your work clothing falls into one of two categories: a uniform or safety and protective clothing. Ensuring you have a visual badge or branding on your clothes is usually enough to pass HMRC’s test for a uniform – as long as you make sure it’s not detachable! You can also request further tax relief on the laundry costs or your uniform, provided that your employer does not provide any laundry services.
As always, if you need help with any of these issues or require some more information, give Defacto-FD a call to make sure you are on the right side of the tax man, so that you’re not caught with your pants down!