Name: Aileen Gates
Company: Campbell Dallas
Aileen Gates is a partner at Campbell Dallas, Chartered Accountants. Email Aileen with your financial queries and she will answer in following issues of BWS magazine. e: firstname.lastname@example.org
Is Looking Good Tax Deductible?
To be successful in business it is essential that we look the part and dress appropriately. This has led many to believe that business dress and grooming should be an allowable deductible expense for tax purposes. There are two tests which determine what expenses are allowable – one for the self employed and one for employees.
For the self employed, the allowability test is if the clothing is wholly and exclusively for business purposes. HMRC restrict deductibility on clothing which they deem to have a duality of purpose, arguing that in most cases clothes are not wholly for business purposes. For example, a well-known case saw a barrister try to claim for the cost of her black suits as a taxable deduction, claiming that she would not have worn these suits for any other purpose than work. However, HMRC argued that the suits worn by the Barrister served a ‘Duality of Purpose’ stating that clothing not only served a business purpose but provided warmth and decency to the taxpayer. As there is no distinct business proportion of the suit there is no proportion deductible for business use as with some other benefits.
For employees, the allowability test is stricter, the expenditure must be wholly, exclusively and necessarily for business purposes. HMRC will consider an expense deductible if each and every holder of employment would have to incur the expense. For example, an employee of a chemical factory is required to wear overalls but finds the clothing uncomfortable so she buys her own which is approved by the employer. There would be no deduction for this expense as the employee was provided with suitable overalls and the expense incurred upon purchasing the replacement overalls was not one that had to be incurred by all holders of the employment. It was not necessary that she purchase the alternative overalls. If she had to purchase the original overalls however, the expense would be allowable as all employees would incur this expense.
Hair and Make up
Where grooming is concerned such as make up and hairstyling, there are some circumstances where these expenses would also be allowable. This is the case where the hair and make up is specifically paid for wholly for business purposes. Here, stage make up and hair would be allowable for actresses; however make up for an office worker would not.
In the past, taxpayers have claimed for haircuts where they are specific to the business. For example if you are attending a business event which is themed and this requires for a certain cut or style this may be allowable. Those who are in performing arts may be able to claim for any hair styling for which they can prove would not be incurred outside of the workplace.
Clothing with a firm’s logo is usually allowable as it could be argued that it is not suitable for everyday use