Limited company owners cannot offset the cost of standard work clothes against tax, although there are some interesting exceptions. Here we look at how HMRC treats clothing expenses.
Claiming for the cost of general work clothing is not allowed
Any business expenses must meet HMRC’s ‘wholly and exclusively’ test, i.e. that the costs in question have been incurred purely for business purposes with no personal benefit.
With this in mind, it is hard to justify claiming the cost of clothes you wear in the course of your job as a contractor or otherwise.
Put simply, you cannot claim for any standard work clothes. HMRC is crystal clear on this point:
No deduction should be permitted under Section 336 ITEPA 2003 for the cost of ordinary clothing worn at work.
Clothing is required for ‘warmth and decency’, as HMRC puts it, which explains why so few clothing-related expenses can be offset against tax.
This includes the concept of an “everyday wardrobe”: even clothes worn only for work often fail the test if they could provide personal warmth/decency or be worn off-duty.
But HMRC provides some exceptions to this general rule, as we explain here.
Protective clothing
A wide range of limited company owners read our guides, not just IT contractors. In some industries, you will need to buy protective clothing and equipment as part of your trade, where it is a physical necessity because of the nature of the job.
This could include any number of items such as hi-vis jackets, steel-capped boots, and other safety equipment. In other trades, things like aprons and protective overalls are examples of allowed items.
If the company provides or reimburses such PPE (often required under health and safety laws following a risk assessment), it is generally allowable as a business expense with no benefit in kind for the director.
See EIM32470 for more details on protective clothing expenses.
Uniforms
Some uniforms are permitted, provided they meet strict criteria. Fundamentally, the uniform must identify the wearer as belonging to a specific profession or firm.
If your company requires its staff to all wear blue shirts and grey trousers, this doesn’t count.
If the uniform includes your company’s badge or logo, this may meet HMRC’s requirements (a permanent, conspicuous badge may suffice; each case is considered on its merits; detachable badges usually do not).
Formal evening dress worn by waiters, for example, may also be tax deductible.
Even when the tax authorities accept that a particular item of clothing is a legitimate business expense, that may not apply to all items worn simultaneously.
See EIM32475 for more details on uniform expenses.
Costumes for actors or entertainers
Any clothing you buy specifically for a performance is allowed.
Again, this is not something most contractors could justify, but we’ve included this point for completeness.
Repair and upkeep costs
Costs relating to repairing and cleaning any allowable work clothing can also be reclaimed. See EIM32480. Again, you cannot claim reimbursement for the repair and upkeep of ordinary work clothes.
HMRC cites Ward v Dunn to illustrate this point.
In this case, a surveyor was not permitted to claim costs for the wear and tear of his clothes. This is despite incurring high costs due to the abnormal amount of ‘use’ his clothes endured.
The reason provided was that such costs did not meet the ‘wholly and exclusively’ test. This demonstrates how tough the rules are.
Some occupations qualify for HMRC flat-rate job expenses covering upkeep of uniforms/tools; see here.
Limited company directors: general advice
The rules on work clothing expenses are the toughest we are aware of.
This is understandable; otherwise many individuals would start claiming the cost of the clothing they happen to wear to the workplace.
Be careful when you claim the cost of anything (including clothing) which has a duality of purpose (mixed business and personal use), or just personal use.
These costs may be treated as benefits in kind, and you and your company will be taxed on their value.
In the unlikely event that you incur clothing-related expenses, please speak with your accountant if you have any questions.
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