If your business provides your staff with a uniform, there are important things to know when it comes to uniform tax. You and your staff will be liable to pay taxes for a uniform if it doesn’t meet certain criteria. So whether you provide your team with a corporate uniform from a high-street retailer, carabiner clad safety gear, or a medical uniform from an online healthcare uniform specialist, this blog should help you and your employees avoid paying unnecessary tax.
Uniforms and branding
Your business uniform is only untaxable when it’s permanently branded. That is, branded with the logo of your business. According to HMRC, if a uniform is not branded it’s not actually a uniform. It’s instead classed as a fringe benefit, as it can be worn outside of work hours. This makes it taxable, meaning you or your staff are liable to pay tax for it. The only type of unbranded uniform that’s untaxable is clothing that’s provided for a specific role, like a medical tunic in a hospital. Or clothing that’s designed to ensure staff safety, like a hard hat or high-visibility jacket.
Ensuring your uniforms remain untaxable
To make sure the uniforms you provide remain untaxable, branding must be permanent. This includes branding via embroidery, screen printing or tabbing. Detachable branding doesn’t count, such as a name tag, as it’s not permanent, meaning that garment could be worn outside of work. Examples of permanent branding include your business logo embroidered onto the sleeve of a business shirt or blazer, or tabbing that’s sewn into the waistband of a skirt or a pair of trousers.
Tax rebates for uniform upkeep
When providing your staff with a branded uniform, it’s important to know that they can claim tax back for the upkeep. This means the money spent to wash the clothing and ensure it’s clean and presentable for them to do their job. Staff can’t claim for the upkeep of something like an unbranded suit jacket, even if it’s part of the dress code for their job. This is because the cost for its upkeep is not exclusively for their job, meaning the jacket could be worn outside of work and would need washing after those occasions too. However, staff can’t claim for upkeep if you offer the facilities for them to wash their uniform, such as a free laundry service. This even applies if they choose not to use those facilities.
The typical claim for the upkeep of a branded uniform is £60, but some professions offer more depending on the nature of the job, with a top limit of £185. Medical staff, for instance, can claim £125 a year. The UK government allows people to make claims for up to five years of consecutive uniform upkeep.
Helping your staff claim tax for upkeep
If your staff are entitled to claim tax rebates on the uniform you provide them, it’s best practice to provide them with the resources for them to do so. Making a claim is a straightforward process, which involves them completing a P87 form. This can be obtained on the UK government website. You should make your employees aware of this process and provide them with the correct information to make a claim successfully. Once the claim has been made, the employee’s tax code will be altered and their tax pay will be reduced. There should then be no need to make future claims in their current employment with you.