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Compliance and Law

UK Tax Laws and Unbranded Uniforms

Posted on 29th November 2016
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In the UK it’s become the norm for most companies to provide employees with a uniform. The stimulus for providing uniform varies; some use it as an opportunity to promote their brand, while others simply see it as encouraging a team spirit.

What many may not realise is that the Inland Revenue enforce a tax on ‘plain’ items of uniform that are issued free of charge to employees; in addition to this over time the law is subject to amendment as HMRC move with the times. Uniform that does not have the company’s name visibly embroidered or printed onto the garments are classed as ‘plain items.’

Making sure that our clients get the very best advice is important to us at Murray. Although the law is the law, our garment technologists have worked closely with HMRC to develop some unique garment constructions that appear standard garments on the surface but are in fact HMRC approved as tax exempt and issuable without corporate branding.

So Is My Company The Right Side Of The Law?

In principle, unless it is essential protective workwear clothing (PPE) that is issued free by the employer it is considered a ‘fringe benefit’ to the employee. HMRC’s stance is that it could be worn outside of the work place without being clearly identified as having been issued by the employer.

The tax liability of 20% of the cost price can be applied either to the employee or the employer if the issued clothing has not been clearly and permanently logo’d; this requirement is not well broadcast by HM Revenue. Removable identification, such as a pin-on badge, will not satisfy the requirement, as the clothing is effectively unmarked once the badge is removed.

Most companies want their corporate uniform to carry the company logo to enhance their image and strengthen their brand, but it is certainly something those responsible for purchasing should be aware of especially as a corporate uniform projects may sit within a project group or department that’s not 100% familiar with UK tax laws.

So Is There A Creative Way Round This? (We Don’t Want All Of Our Staff In Branded Uniform)

Traditionally, the simple answer was no; although branding items of clothing could be done very subtly by using a woven ‘tax tab’ sewn into the seams of the garment which can be clearly visible when the garment is being worn. A tax tab distinguished the garment as workwear rather than leisure wear and meant that the garment complied with HM Revenue regulations.

However, Murray’s cooperation with HMRC facilitates our understanding of how companies can fully satisfy UK tax laws whilst achieving their own objectives however subtle they may choose to be.

Please note that this article is for guidance only and professional advice should be obtained before acting on any information contained herein.