Tax On Workwear: Who Has To Pay?

Tax is a minefield at the best of times. When it comes to workwear, there are plenty of rules and exceptions to get your head around. What counts asworkwear? Who pays tax on it? And can you claim it back on expenses?

In this article, we will talk you through the taxes that apply to workwear and explain what you need to do.

Please note: This information is for guidance only - if you’re not sure of your responsibilities, consult a tax professional.

What taxes apply to workwear?

Official work uniforms and personal protective equipment (PPE) supplied by employers to their staff are usually exempt from tax and National Insurance as a benefit in kind (exceptions may apply).

However, VAT is payable on most types of workwear and PPE, usually at the standard rate of 20%. This includes garments like jackets, overalls, and hi-vis vests, as well as PPE such as safety eyewear and ear defenders.

The rare exceptions are safety boots and head protection such as hard hats and bump caps. These are zero-rated as long as they fit into the official category of “protective boots and helmets for industrial use”.

Accessories for industrial helmets may be included if they’re fitted as an integral part of the helmet (they would be standard-rated if supplied separately).

However, the zero rate applies specifically to protective boots (this is usually taken to mean footwear that extends above the ankle) and not to safety shoes or trainers, even if they meet the other requirements.

To be eligible for the zero rate, the boots and helmets must:

• be manufactured to standards which satisfy the requirements of regulation 8(2) of the Personal Protective Equipment Regulations 2002*

• show a mark indicating conformity

• be for industrial use

• not be supplied to persons for use by their employees.

* Although HMRC still cites the 2002 PPE Regulations, these were revoked by the Personal Protective Equipment (Enforcement) Regulations 2018, which enforces Regulation (EU) 2016/425. Conformity is now UKCA (or CE in Northern Ireland) under the 2016 Regulation.

Who has to pay tax on workwear?

VAT on workwear is payable on most goods purchased for business purposes, but there are some exceptions.

If a self-employed person or individual buys exempt or zero-rated items for their own use, they don’t have to pay VAT. But if an employer buys these items from a supplier with the intention of providing the equipment to their employees, they do have to pay VAT and then recover it.

If your business is a charity or a non-profit firm, you may still have to pay VAT on workwear, but it’s best to check this with HMRC as exceptions may apply.

What is tax relief?

Income tax relief is where you deduct an expense from your income, meaning that your income tax is reduced.

For example, if you earned £20,000 a year, putting you in the 20% tax bracket, and you spent £140 on something you can claim relief on, you would not pay tax on that £140 - meaning in this instance you would get a £28 reduction in your tax bill (because £28 is 20% of £140).

What is VAT relief?

Similarly to income tax relief on expenses, the amount of VAT on an expense is deducted from the amount of VAT you owe.

For example, if you spend £240 on some equipment, VAT will make up 20% of this figure, equating to £40. When you complete your VAT return, your VAT bill would then be reduced by £40 (assuming you kept the receipt and put it through as an appropriate expense).

How to get tax relief on workwear

So, how does the tax relief process work - and can you claim for workwear on your tax form?

As an employee

If you have to wear a uniform or other specialist clothing for work, you can claim tax relief for cleaning, repairing, or replacing it - but not for the initial cost of buying it.

For money spent on maintaining uniforms, you can claim relief on either the actual amount you’ve spent (in which case you’ll need to provide receipts) or a fixed amount called a “flat rate expense” or “flat rate deduction”, if there’s one listed for your particular job.

(If your job isn’t listed at the bottom of the page here, the flat rate expense will be £60. In this instance, assuming you pay tax at a rate of 20% in that year, you will pay £12 less tax.)

However, you cannot claim tax relief for PPE items. This is because your employer must provide genuinely necessary protective equipment to you free of charge (or ask you to buy it and give you the money back).

In limited cases, your employer may require you to buy protective clothing that doesn’t count as PPE. Examples might be a mechanic’s boiler suit or a chef’s heavy apron that stops the clothes underneath getting dirty or worn.

You may be able to claim tax relief on the cost of maintaining or replacing this clothing (but not the everyday clothes you wear underneath). Do this either online at HMRC or through postal form P87. If you file a Self Assessment return, use box 18 of the SA102 employment page.

As a self-employed contractor

As a sole trader or an individual in a business partnership, workwear is classed as an allowable business expense. This covers uniforms, PPE, and any other protective clothing required for your role. Keep records of all your expenses in case HMRC asks to see them.

• VAT-registered:

Put the net figure through as an expense on your Self Assessment return, and reclaim the VAT through your VAT return.

• Non-VAT registered:

On your Self Assessment return, include the total value of the workwear - inclusive of VAT - under your general business expenses. This will be offset against your profits to calculate your tax bill.

As an employer

If you’re VAT registered, use your VAT return to recover VAT on workwear you’ve bought for use in your business. You’ll also need to keep records and valid VAT invoices as evidence of your costs.

What if your company gives employees branded (non-protective) clothing as a perk? You can recover the cost as input tax - but if the gifts are worth £50 or less (excluding VAT) per recipient per year, you won’t have to account for this as output tax. As always, it’s best to check the finer details on the HMRC website.

The takeaway

It’s important to understand the tax implications of buying workwear for your own use or for your employees. In most cases, you’ll pay VAT - but you should be able to recover it or claim tax relief on it later. It’s always best to check with HMRC!

Ready to buy workwear? Visit our online store or give our friendly sales team a call with any questions.

FAQs

Does VAT apply to smart clothing for work?

Some employers insist that staff wear smart clothing or a specific colour scheme for work. However, this doesn’t count as a uniform. Standard VAT applies to garments like suits, dresses, trousers, and shirts, and you typically can’t claim relief from HMRC. These items are treated as dual-purpose, because theoretically you could also wear them outside the workplace.

What counts as protective clothing?

HMRC defines clothing as protective if it is “worn as a matter of physical necessity because of the nature of the job”. Under the Personal Protective Equipment at Work Regulations 1992, employers are legally obliged to provide PPE where a risk assessment deems it necessary (or reimburse the costs if the employee buys it).

A 2022 amendment to these regulations extended employers' duties to limb (b) workers (such as agency, casual, or gig workers) who previously were not covered. Now, if a risk assessment shows a limb (b) worker needs PPE, the employer must provide it free of charge as they do for employees.