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One of the biggest misunderstandings which may exist among people who are starting u their own business is that of thinking that all of their clothing costs can be put against tax. Actually, in most cases, this is not possible.
What can be put against your tax is up to the taxman and his rules vary when it comes to
– clothes for everyday use
– a uniform
– clothes for protection
For information on different Tax rates and rules take a look at this post on VAT recovery.
Clothes for Everyday Use
You may remember Mallalieu v Drummond( 1982). A claim was made by a barrister for the replacement and laundering of her court clothes against her tax, she based this on needing to dress in a particular way for her profession. Her claim was refused by the House of Lords.
When it comes to clothes which are classified as part of ‘everyday’ wear, a business is not permitted to claim such clothing costs against tax. This is even the case when the taxpayer can prove that they will only wear the garments for their profession – whatever this may be from a taxi driver to a software engineer. The fact that the person makes a choice not to wear the garments outside of their work is not relevant, the sole point is whether the clothing could be worn as someone’s ‘every day’s wardrobe.
Even though most businesses need to project a good appearance, the cost of their clothing is not allowable. Hence the check short that a tech expert wears, the trainers that a gym teacher wears and the suit that a solicitor wears all fall in the same category. The clothes may have a professional purpose, however, they also have a purpose of keeping the wearer warm and looking dignified.
In this case, how is it possible to claim clothing costs as a business expense?
When clothing is not classified as ‘everyday’ wear, it can be claimed against tax. Hence uniforms for nurses would be one example. Clothing which has the company logo embroidered would also be another example of a uniform.
Clothes for Protection
When clothing is used to protect the worker from injury or to safeguard their health it is also tax deductible. The trades often have such clothing, for example, hards hats, gloves, work boots and so forth).
Other than getting their faces in the paper, have you ever thought about why actresses fork out a significant amount of money on their dress for a film premier? It’s because it is tax deductible! According to the taxman, an actress can purchase a dress with the sole purpose of attending a premier performance and that outfit is allowable against tax.
In addition, clothing purchases for a TV, film or stage performance is also allowable. The clothing is not viewed in this case as ‘everyday wear but rather as a ‘costume’ required for a performance.
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