The fact that employees can reclaim VAT on their workplace clothing is relatively common knowledge, but some employees and employers alike remain unclear on the exact rules surrounding this form of tax relief. Normally, the question of whether a given item or set of clothing is eligible for reclaiming VAT can be settled with just a brief look over the essential rules.
If you remain in doubt about the tax status of a particular outfit, piece of clothing, or uniform, then just speak to your accountant. They will be able to quickly and expertly clarify the matter for you.
If an employee has a workplace uniform which they have had to purchase themselves, then this will be eligible for reclaimed VAT. There may also be tax relief available on the costs associated with laundering and maintaining the uniform.
One common source of confusion here is the question of whether suits qualify. After all, surely if your workplace requires you to wear a suit, that is your workplace uniform. If you have purchased that suit yourself specifically so that you can wear it in the workplace in line with your employer’s requirements, then it is workwear. Unfortunately for office workers everywhere, HMRC has stated categorically that this is not the case. Wearing a suit to work counts as presenting a professional image rather than actually having a workplace uniform, and even if it is a specific requirement of the workplace this does not qualify for tax relief under the current rules.
Uniforms are not the only thing that will qualify for VAT relief. Specialist clothes that are specifically designed for the workplace and only used for work, but which the employee has had to buy for themselves, will also qualify.
This is a fairly loose category on paper, but in practice it normally tends to apply to a few quite specific items of clothing. Protective clothing, such as protective footwear or trousers designed to resist slippage with machines such as chainsaws, is one major category. Safety wear, such as reflective jackets and other high-visibility clothing, is another fairly prominent example.
The Bottom Line
Ultimately, despite all the complexities surrounding them, the rules are based around one, lone, fairly simple principle. To be eligible for employees to claim tax relief, clothing must be specially and exclusively for the workplace. It must not be regular everyday clothing, even if only worn for work, and it cannot be clothing that you use regularly except as workwear.
In theory, any item of clothing that you can demonstrate is exclusively for workplace use can qualify. However, this is unlikely to be the case outside of the categories discussed above. It also does not change the fact that a suit does not qualify even if it is used for work, partly because HMRC considers dress codes to be separate from actual, formal company uniforms.