“Can I buy clothes through my business?” asked Jamie, a client, as we were having a coffee last week. “I’m back in the office now, and the client meetings are stacking up. And 2 years of working at home means I’ve put on a few pounds!”
Sadly I had to tell Jamie the bad news. “In most cases, no. You can’t claim the costs of your suits and shirts through the business”.
Perhaps the biggest urban myth adopted by people starting their own business is that you can claim the cost of business clothes against tax. In most cases, you can’t.
The taxman has different rules for clothes that are
– everyday clothes
– a uniform
– protective clothing
– a costume
Everyday clothes
Many a keen business student amongst you will remember the case of Mallalieu v Drummond [1983]. A barrister claimed the cost of replacing and laundering her court clothes against tax as it was a requirement of her profession to dress in a certain way to attend court. The House of Lords refused this.
A business cannot claim against tax the costs of clothing which forms part of an ‘everyday’ wardrobe. Most professionals have to keep up appearances but their clothing costs are not allowable. This rule applies to the accountant’s suit, the software techies check shirt, and the gym instructor’s trainers. The clothes have a professional purpose, but are also worn for warmth and decency.
Beware if you buy uniforms for your staff. As some of these might be classed as a benefit in kind.
So can I buy ANY clothes through my business?
Uniform
The cost of clothing that is not part of an ‘everyday’ wardrobe can be claimed against tax. This would include uniforms for the police and nurses for example. Clothing with an embroidered company logo would also fit the uniform definition.
Protective clothing
The cost of clothing needed to protect a worker against injury or for health and safety purposes is tax deductible. This can apply in particular to the trades industries (work-boots, hard hat, knee pads, gloves, overalls etc.)
