Clothes you wear in the salon | can you get the tax back?

Unless you want to get arrested (or you’re in a naturist resort) everyone needs to wear something in the salon. But can you get the tax back on what you wear for work? And if so, how?

Quick answer

• ‘Ordinary’ clothing: no – you won’t get the tax back.

• ‘Business’ clothing: maybe, depending on what it is:

• HMRC are very strict about what constitutes ‘business’ clothing.
• Uniforms and protective clothing is likely to be allowed by HMRC.
• Clothing with the salon’s logo on it: most likely yes, if it passes a few checks.

• There are 2 ways to get the tax back (depending on whether the company has paid for the clothes, or the employee has).

• And remember, if you can get the tax back on certain clothes, you can also get the tax back on washing them!

The rest of this article tells you more.

What’s HMRC’s stance on all this?

This is what they say:

For an expense to be allowable for tax, it has to be incurred “wholly and exclusively” in the salon’s business.

HMRC go on to say that: in the same way everyone has to “eat to live”, so similarly everyone needs to wear something for “warmth and decency” (whether they are at work or not).

In other words, you’re going to cover yourself up whether you go to work or not, so the cost of the clothes you wear to work cannot pass the “wholly and exclusively” test.

And to HMRC, it does not matter whether you’ve bought your clothes only for work (and would never dream of wearing them to the champagne bar), what counts is whether you could.

Hold on though, some clothing is allowed

Having said that, HMRC do allow 3 specific types of clothing:

• Uniforms (such as a beautician’s tunic)
• Protective clothing (required for your work)
• Logo’d clothing

So if your staff are required to wear a ‘uniform’ then you can most likely get the tax back, but read on…

Logo’d clothing

By Logo’d, we’re talking about clothing that has a salon logo on it.

HMRC are a quite vague in this area but do say that: “fixing a permanent and conspicuous badge to what would otherwise be ordinary clothing may be enough to make it a uniform, but each case must be considered on its merits.” In particular HMRC will check that:

1. There is a permanent and conspicuous badge on it

1. It is not only seen as a uniform that identifies salon employees but also is used as advertising, since every employee is required to wear it in the salon as part of their contract

1. The clothing is visible (as opposed to a logo’d t-shirt that is never on display as it’s always worn underneath a  sweat top).

The essential test is whether your employee would readily be recognised as wearing a uniform by a person in the street. A detachable badge for example is not sufficient for this.

So if you do get your staff to wear t-shirts or fleeces in the salon, the safest option is to get them permanently and conspicuously logo’d.

Washing your clothes – get even more tax back

If your clothing is allowable, so then is the cost of washing and ironing it!

How to get the tax back

Where the salon pays

If the Salon provides the allowable clothing for its staff, then the cost (of the clothes and washing them) is recorded in its accounts and reduces the amount of profit that it pays corporation tax on.

Where the employees pay

If the employees are required to pay for their own allowable clothes, they can include this cost in their self assessment return each year, or contact HMRC to have their PAYE tax code amended to reduce the tax they pay each month.

Additionally, if the employee is required to wash their uniform, they are able to reclaim a standard flat rate allowance of £60 per year in the same way!

In summary

‘Ordinary’ clothing is not allowed as a business expense and so you cannot claim the tax back. However, certain ‘business’ clothing (for example uniforms, protective clothing  and logo’d t-shirts) may well be allowable, as is the cost of washing them.

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• Posted on November 16th, 2017 in Tax Advice