Claiming tax relief on work clothes
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You can only claim tax relief on work clothes if the cost of buying them is ‘wholly, exclusively and necessarily incurred in the performance of your duties.’ General clothing worn at work isn’t eligible unless it is clearly distinctive or protective.
Examples
❌ Claiming on the cost of smart clothes such as a suit or dress for networking or meeting clients isn’t allowed.
✅ The cost of a lab coat, if you’re a scientist, would be allowed.
✅ The cost of a uniform (of any description) would be allowed IF it’s branded with your business logo. The same would apply to a jacket or fleece if it’s branded with your business logo.
✅ The cost of steel toe-cap boots would be allowed for a builder, but ❌ not for a bookkeeper (unless they work on a building site😉).
If your company pays for your work clothes…
If your limited company pays for your work clothes, there may be a benefit-in-kind charge. However, the same rules apply here…
👉Clothes paid for by your company are only exempt from a benefit-in-kind charge if the clothing is necessary for your role and used solely for work purposes – for example, safety helmets, overalls and protective gear for construction workers.
👉Smart clothes for carrying out a sales or marketing role are not exempt. Smart clothes must be declared as a benefit in kind, even if you don’t wear them outside of work.
👉Uniforms that are clearly distinctive (i.e., branded with a company logo) are also exempt from a benefit-in-kind charge. That said, it could be argued by HMRC that clothing such as a fleece, which can be worn when not working, is a benefit in kind. However, if the fleece is advertising your company, it could be counter-argued that it’s a marketing cost. It would likely depend on the costs involved. For example, a company car branded with a business logo is still considered a benefit in kind as you’re getting access to a car paid for by the company.
📢❕The information in this blog post was correct at the time of writing. Please check with your accountant for the latest information or, if you don’t have an accountant, join the Financial Resilience Hub to get access to one of ours! Alternatively, keep an eye on HMRC’s website for updates.
See also…
Information from our blog:
👉 How private use of your company car will be taxed in 2024/25
👉 Pre-trading expenses – be aware of the rules
Online courses:
👉What expenses can my limited company claim?
👉What expenses can I claim as a sole trader?
These easy-to-follow, bite-sized courses are free for Financial Resilience Hub members; non-members can currently buy these for £49.99 (look out for future special offers and discounts, though😉).
From the HMRC:
ABOUT THE AUTHOR
Helen Monaghan is a Chartered Management Accountant, accredited NLP Practitioner & Finance Coach. Both a psychology graduate and an accountancy graduate, she has authored three business books, which beautifully bring together psychology, finance, and tax to empower the reader about money. Helen is the CEO of HM Finance Coaching & Advisory Ltd, a company that provides financial education and business mindset coaching to small businesses across the UK, in addition to accountancy services for limited companies in Scotland and across the UK. Helen is also the founder of The Financial Resilience Hub – find out how we can support you, and your business, to be financially resilient through our monthly membership.
© Helen Monaghan
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