Claiming business expenses for work clothes
When you're in business as a sole trader, you'll almost certainly buy clothes to wear when you're working. So when can you put those into your accounts and claim tax relief on them? Here are a few useful things to know when it comes to claiming for clothing in your business.
1. Is it part of an everyday wardrobe?
HMRC's basic rule is taken from the case of a barrister who tried to claim tax relief on the dark suits she bought to wear for court appearances. She was denied this tax relief because HMRC said she could have worn those suits on occasions that didn't relate to her work. In addition, HMRC says that clothing has a dual purpose of both making you presentable for work and keeping you warmly and decently clad. As a result, clothing that could be part of an "everyday wardrobe" is not allowable for tax relief.
2. Is it a uniform?
If you have to buy a uniform that identifies clearly what you do, you can put that into your accounts and claim tax relief on it.
An example would be a uniform for a self-employed nurse.
However, you couldn't claim tax relief on buying any clothing other than your uniform, such as shoes or stockings.
3. Is it protective clothing?
You're also allowed to include the cost of protective clothing, for example if you're a jobbing builder and you buy steel toe-capped boots and a helmet to wear on site.
What you can't include are jeans and a shirt to wear on site, because those would be part of an everyday wardrobe. It's only the protective clothing itself you can claim.
4. Are you an entertainer and is it your costume?
If you are an actor, musician, or other entertainer, and the clothes you're buying are a costume, or "acquired for a film, stage or TV performance", then you can claim tax relief on those clothes.
For example, if you're a children's magician and you buy a cape to dress up for your act, then you can claim the cost of that cape.
5. Are you wearing evening dress for work?
HMRC gives the example of a waiter who has to wear evening dress including a tailcoat for work. In this case, this isn't part of an "everyday wardrobe" so it can be claimed.
Be careful! Because the cost of buying or hiring evening dress for a business function such as an awards ceremony would not be allowable for tax. This difference is because attending these functions isn't necessary for you to do your job, whereas for the waiter who is serving you, it is a key part of his job.
6. Branded clothing
People often ask whether the cost of a t-shirt or fleece branded with the business's logo would be allowable. This doesn't qualify for any of the exemptions above, but it could be worth including it as advertising and promotion costs - though HMRC may still argue that the cost of this garment has a dual purpose and isn't just for business, because it keeps you decently clad as well as advertising your business.
This is a grey area so if you are not sure whether you can include a particular cost, speak to your accountant.
More expenses tips:
- How to manage your expenses day-to-day
- Working from home expenses
- Food and drink expenses
- Travel expenses and mileage
- Entertaining expenses
- Scanned receipts and HMRC
Disclaimer: The content included in this guide is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this guide. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.