Claiming for Business Clothing Against TAX

[IR35 Avoider]

I think she lost because her clothing served a dual purpose. In addition to being appropriate for court, it also prevented her from being naked, and that was not a business purpose, therefore the wearing (and purchase) of it was not "wholly and exclusively for the purposes of trade" which is the criterion that an expense must fulfil to be tax deductible.

[Maxamus]

When Hector takes you to court for fraudulent expenses

ha ha nice

[oraclesmith]

I think she lost because her clothing served a dual purpose. In addition to being appropriate for court, it also prevented her from being naked, and that was not a business purpose, therefore the wearing (and purchase) of it was not "wholly and exclusively for the purposes of trade" which is the criterion that an expense must fulfil to be tax deductible.

...and I guess it was normal high street clothing - just a dark colour which she wouldn't have worn by choice - which is a bit of a weak argument and opens up all sorts of tax dodges. I guess if it were court robes, then it would be solely for the purpose of doing business.

[ratewhore]

I wonder if male escorts can claim the cost of cock-rings. Damn expensive!!!

[RW in possible plan B mode]

[oraclesmith]

There's nothing to stop her wearing court robes in public either.

Or in private !! Wahay!

Of course that holds for all work clothing.

[philip@wellwoodhoyle]

Interesting new wording in the latest taxes act - Income Tax (Trading and Other Income) Act 2005

"Wholly and exclusively and losses rules
34 Expenses not wholly and exclusively for trade and unconnected losses

(1) In calculating the profits of a trade, no deduction is allowed for-

(a) expenses not incurred wholly and exclusively for the purposes of the trade, or
(b) losses not connected with or arising out of the trade.
(2) If an expense is incurred for more than one purpose, this section does not prohibit a deduction for any identifiable part or identifiable proportion of the expense which is incurred wholly and exclusively for the purposes of the trade. "

I don't think this new wording has been reflected in HMRC's manuals or guidance leaflets yet, nor will it automatically supercede the long history of case law, but it certainly does suggest that the original logic of not allowing normal work clothes on the sole grounds of duality of purpose no longer applies and that should open the flood gates for people to perhaps claim a proportion of their clothing costs based upon the time spent wearing them for work as opposed to the total time spent wearing them - perhaps???

There have been some limited articles on this topic in the professional accountancy press, but nothing substantial has yet appeared - I wonder if HMRC's guidance notes for the 2006/7 tax returns will be amended to cover this?

[Mustang]

If I were to get half a dozen polo shirts made up with the MyCo logo on them, would this be allowable as a business expense?

[Sockpuppet]

If I were to get half a dozen polo shirts made up with the MyCo logo on them, would this be allowable as a business expense?

Yes.

[PAG]

If I were to get half a dozen polo shirts made up with the MyCo logo on them, would this be allowable as a business expense?

probably you'll get away with that. But then once in the radar they wil use IR35 against you. Then you'll be worse off, even if you are outside IR35, think about all that waste of time !!!!

[oraclesmith]

If I were to get half a dozen polo shirts made up with the MyCo logo on them, would this be allowable as a business expense?

I guess they would if you wore them for work and not social occasions. For example, corporate staff may have an official company uniform of a logo jacket, shirt/blouse and trousers/skirt which they can look after, wash etc but they aren't the sort of thing you'd were to the pub. A nice polo might not fit into this model. A company logo tie might.

Another way of looking at this is if you had some T-shirts or polo's made up for promotional use. You'd have to actually use them for promotions though (eg. give some away), which may negate any tax savings.