Tax on Corporate Clothing

The Inland Revenue enforce a tax on plain items of clothing that are issued to employees as a benefit in kind.  This liability is 20% of the cost and can be applied to employers or employees if the garments are not clearly and permanently branded.

  A temporary branding, like a sticker will not suffice.  For suiting products this can be done by using a woven ‘tax tab’ sewn into the seams of the garment which can be clearly visible when the garment is being worn. Embroidered or printed logos are branded on all other products including t-shirts, fleeces and aprons. This distinguishes the garment as work wear as opposed to leisure wear and complies with HM Revenue regulations.

With brand image so important for companies today, the style of staff uniforms have developed significantly over the last few years. Smart, chic suits and contemporary tops are common place and are garments that many people are happy to wear outside work hours. Therefore companies must be aware of the rules to ensure that they and their employees don’t fall foul of the law.