Claiming a tax deduction for clothing expenses

If you're claiming a tax deduction for clothing expenses it's important to understand the basic principles.

Claiming a tax deduction for clothing expenses

As mentioned previously, for an expense to be allowed, it must be incurred wholly and exclusively for business purposes. In the case of a director or employee it must be incurred for the purpose of their job.

Claiming a tax deduction for clothing expenses - HMRC's view

The tax rules state that clothing is worn primarily for the purposes for personal decency and warmth. When clothing is used for work it will therefore have two purposes and therefore can't be exclusive. This basic principle was established in the Mallalieu v Drummond tax case.  

Therefore if you buy clothing for work on the surface of it, you would not be able to claim a tax deduction for this cost. However are there any exceptions where claiming a tax deduction for clothing expenses might be allowed?

Circumstances when claiming a tax deduction for clothing expenses is allowable

The above general rule does not apply to uniform or special clothing required for the job. If this is provided for by your company, the cost would be allowable. There would also be no taxable benefit in kind.

Typically HMRC would not regard the following as 'everyday clothing' and thus eligible for tax relief:

  • Uniforms (waiter's tails, a nurse's uniform)
  • Costumes (for film, stage, or TV ' including a TV interviewer's suit, Actress's ball gown)
  • Protective clothing

If your employees are required to wear uniforms and as the business owner you are required to the same, you could benefit from this favourable tax treatment. 

HMRC's view of what is regarded as a uniform is set out in their guidance. One obvious example is where an airline requires its cabin crew to wear a blue jacket with a blue skirt or trousers. These have the airline name prominently sewn into the material. 

If you fixed a permanent and conspicuous badge to what would otherwise be ordinary clothing that might be enough to make it a uniform. However the taxman states each case must be considered on its own merits. Perhaps the key test is whether you or your employees would readily be recognised as wearing a uniform by a person in the street. 

Claiming a tax deduction for clothing expenses if you're a sole trader or partner in a business?

The position is similar to that of a director or employee. If the expenditure is not incurred wholly or exclusively for the business then no tax deduction will be allowed.

interestingly enough HMRC accept that actors and entertainers may acquire what might appears to be everyday clothing and claim a tax deduction. However if it is subsequently used privately then no deduction is due.

What's the VAT position?

Providing clothing is a business expense then any VAT charged on this purchase can be reclaimed.

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