With this in mind, here are five important things to know about tax when it comes to business uniforms.
Branding makes a uniform untaxable
Most people probably think of a uniform as clothing that staff of a business have to wear to work as part of their job. The truth is, according to HMRC, the clothing only becomes a uniform when it is branded. That is, permanently branded with the logo of the business it belongs to. It is the branding that distinguishes the difference between it being ordinary clothing and clothing that functions as a business’s uniform. If a uniform is not branded, it becomes what’s known as a fringe benefit.
This is because it technically can be worn outside of the workplace, making it taxable. This means the employer or employee will have to pay tax on it, regardless of whether the clothes are worn outside of work or not.
Non-permanent branded uniforms are taxable
Only visible permanent branding will ensure a uniform isn’t taxed. Non-permanent branding doesn’t count. So clothing that’s worn with detachable branding, like a name tag, will still be taxed because, in the eyes of HMRC, that garment could still be worn outside the workplace.
Different types of permanent branding include embroidery, screen printing and tabbing. Examples could include a logo embroidered onto the sleeve of a business shirt, branding that’s screen-printed on the back of a construction worker’s hoodie, or tabbing that’s sewn into the waistband of a skirt.
All items must be branded to avoid tax
Branding on uniform items shouldn’t be selective, such as choosing to brand bigger items and leave accessories unbranded. To ensure you avoid uniform tax, every item should be branded – even if they are worn together. An apron that’s worn over a shirt, for instance, should be branded.
If branded trousers and a branded blazer are worn together with a shirt to create a business suit, the shirt will still be taxed if it’s not permanently branded. A business that only provides items of its uniform in its brand colours also wouldn’t satisfy HMRC. Each item would need to be permanently branded with the company’s logo.
Clothing for safety and specific roles is untaxable
Clothing that’s provided for a specific role or to ensure safety is exempt from tax, so doesn’t need to be branded to avoid paying it.
This includes safety gear, namely personal protective equipment (PPE), such as hard hats, safety shoes, and high visibility jackets and waistcoats. Clothing for a specific role that’s untaxable could include a medical tunic that’s worn for attending to patients or a scrub that’s worn for performing surgical operations.
Tax can be claimed on uniform upkeep
Employees can claim tax back on a branded uniform that they’ve been provided with, or clothing that they’ve been given for a specific job. But this only applies when the employee has to pay for the uniform’s upkeep. In other words, they have to wash it and look after it to make sure it’s presentable for work.
Most people in the UK can claim £60 for the upkeep of a branded uniform. However, there are some professions where employees can claim more. This includes medical staff who can claim up to £125 a year.