Uniform Rate

  • July 2, 2018
  • March 29, 2023
  • Shaz Nawaz
  • 6 min read

If you are required to wear a uniform to work, or use specialist protective clothing, or if as an employer you provide these for your workforce, then this is a tax-deductible expense.

Here’s some of the main points to watch:

  • As an employee, you can claim tax relief if you pay for the cost of repairing or replacing small tools you need to do your job (e.g. scissors, screwdrivers, an electric drill) or cleaning, repairing or replacing uniform items. This includes laundering! You can either claim the cost (supported by receipts) or use the flat rate agreed by HMRC for your industry sector.  You can’t claim for initial purchase of small tools or clothing (although you may be able to claim capital allowances for equipment)
  • As an employer, the cost of equipping your workforce is a tax-deductible expense of your business – provided of course that it complies with the usual rule for business expenses of being ‘wholly and exclusively’ for the purposes of the business
  • To ensure compliance with the rules, you may want to have a policy that employees may only wear the uniform and use the equipment for work purposes
  • What is a uniform? HMRC say in EIM32475 that the essential test is whether employees would be recognised as wearing a uniform “by the person in the street” and add that a detachable badge is not sufficient to regard their clothing as uniform for income tax purposes. This is particularly important in industries such as retail clothing, where many employers require their shop floor staff to wear the retailer’s branded products.
  • In this instance, another factor comes into play – namely whether the employees are allowed to keep the clothes (which presumably are entirely wearable for private use   – depending of course on personal taste) and are the employees allowed to travel to and from work in the clothes? If they leave the employment, are the clothes required to be handed back to the employer?
  • From the employer’s point of view, it is of course quite arguable that anything provided to the employee for use in their job may be a business expense (as long as it meets the ‘wholly and exclusively’ rule and is appropriate to that employee’s role and status). But if there is an element of ‘private’ benefit then this will be a benefit in kind, taxable on the employee and reportable by the employer who is primarily responsible to HMRC for deducting PAYE income tax and employee’s NI and for paying employer’s NI.
  • The leading case on whether or not clothing purchased exclusively for work purposes could be tax deductible is Mallalieu v Drummond (1983). Miss Mallalieu was a practising barrister (and therefore self-employed) and her case was that the custom of her profession was ‘barristers wear black’ and that this was particularly the case when appearing in Court (in fact the guidelines issued by the Bar Council for Court appearances were not specifically ‘black’ but ‘dark colour’ with a white shirt). She maintained that she never wore black in private life and wished to claim for the cost of cleaning, maintaining and replacing outfits which complied with the rules and which were in fact worn only for work purposes. No doubt many of us are required to comply with a dress code at work which does not match our leisure choices!.
  • The outcome was that Miss Mallalieu’s choice not to wear black other than for work was exactly what – a personal choice. Moreover, since the clothes were perfectly capable of being worn at any time to keep her warm and covered, there was a duality of purpose which therefore meant that the cost was not eligible for relief (i.e. it failed the ‘wholly and exclusively’ test). This was so even though the Court accepted that Miss Mallalieu’s primary motive in selecting the items was to enable her to carry out her job (she would not have been allowed to appear in Court unless correctly attired). The case went to the House of Lords and the presiding judge distinguished this case from the case of, say, a nurse or a waiter (who is required to wear tails), in that these professional clothes were, in fact, a uniform (and would be perceived as such). As is often the case with taxation law and practice, it was ‘a matter of degree’.

As you can see, there are a number of traps for the unwary in claiming this relief. Do please share your experiences with me and I’ll try to find an answer to any queries!

AA Accountants

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