business advice
BUSINESS WOMEN SCOTLAND 31
ask the expert
CAMPBELL DALLAS • Tel: 0141 886 6644 • www.campbelldallas.co.uk • Titanium 1, King’s Inch Place, Renfrew, PA4 8WF
Aileen Gates is a partner at Campbell Dallas, Charterted Accountants.
Email Aileen with your financial queries and she will answer in following issues
of BWS magazine. e: [email protected]
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.
Self employed
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.
Employees
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 )]