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Understanding tax exemption of branded uniform

Posted on 17th September 2020
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Tax tabs and corporate logos – what are the tax benefits?

Branding a uniform makes it tax exempt

Most people probably think of a uniform as clothing that staff must wear as part of their job. According to HMRC, the clothing only becomes a uniform when it is permanently branded with the company’s logo. It is the branding that distinguishes the difference between it being ordinary clothing and clothing that functions as a uniform.

Unbranded uniform does not apply, even if it is only temporary

If a uniform is not branded, it becomes what is known as a ‘fringe benefit’. This is because it technically can be worn outside of the workplace, making it taxable. This means the employer or employee will have to pay tax on it, regardless of whether the clothes are worn outside of work or not. So clothing that’s worn with detachable branding, like a name tag, will still be taxed because, in the eyes of HMRC, that garment could still be worn outside the workplace.

Exemptions

Unbranded uniform does not apply, even if it is only temporary

If a uniform is not branded, it becomes what is known as a ‘fringe benefit’. This is because it technically can be worn outside of the workplace, making it taxable. This means the employer or employee will have to pay tax on it, regardless of whether the clothes are worn outside of work or not. So clothing that’s worn with detachable branding, like a name tag, will still be taxed because, in the eyes of HMRC, that garment could still be worn outside the workplace.

Permanent branding options

Different types of permanent branding include embroidery, screen printing and tax tabs. This could include a logo embroidered onto the sleeve of a polo shirt, branding that’s screen-printed on the back of a worker’s jacket, or sewing a tax tab into the waistband of a skirt or pair or trousers. Every item of clothing must be branded to be tax exempt, even if they are worn together. For example, an apron worn over a shirt, for, must also be branded.

What are your options?

Please contact us for further advice about tax exemption with uniforms – 02476 587980 or email [email protected]

You can also visit gov.uk for more information: https://www.gov.uk/expenses-and-benefits-clothing