VAT on workwear and uniforms

Many organisations provide uniforms or protective clothing for staff to wear while carrying out their duties. In many cases, such workwear is essential, either to meet industry requirements (e.g., health and safety regulations) or to create a certain professional appearance and environment for customers.

You might assume VAT-registered organisations can easily reclaim on work clothing. As is often the case with VAT, the rules can be more complicated than they first appear.

Protective clothing

HMRC allows businesses to reclaim VAT on uniforms or protective clothing that are:

• Required solely for the performance of duties, and
• Not suitable for use outside work.

In practice, you can reclaim input VAT if the clothing is used only for work and will not be worn for personal use. For example, this includes safety helmets, gloves for site workers, and steel-toe boots.

Specialist clothing for professionals

VAT can also be reclaimed on specialist clothing worn in the course of professional duties. For example, barristers may reclaim VAT on wigs, gowns, and bands purchased for court. Similarly, stage costumes used only in performances, such as wigs worn by entertainers, are eligible.

In contrast, ordinary clothing (e.g., a suit worn by a TV presenter) is considered suitable for private use. In such cases, input VAT is not recoverable. Businesses may also need to account for output VAT when supplying clothing to individuals, leaving no net VAT benefit.

General office clothing

VAT recovery is generally restricted to standard business attire, such as suits or smart casual wear. HMRC does not allow VAT recovery just because a business requires staff to maintain a high standard of dress.

There is a potential exception if the clothing is clearly a company uniform. For instance, if it features a prominent company logo and is not usually worn outside of work, you may be able to reclaim input VAT.

Clothing provided as staff perks

HMRC also recognises that perks provided to staff may be treated as business expenses. Clothing supplied as a staff perk may qualify as a business expense, allowing input VAT to be reclaimed.

However, if the total value of those gifts provided to an individual staff member exceeds £50 (excluding VAT) in any 12-month period, this is treated as a deemed supply. In such cases, output VAT must also be accounted for. This effectively offsets any VAT advantage.

VAT on workwear: a recap

Overall, HMRC’s position is that input VAT can only be reclaimed on clothing that is specifically and exclusively used for the workplace. If you can demonstrate that an item of clothing is intended for workplace use and is unsuitable for private wear, HMRC may allow the input VAT to be recovered.

Additionally, organisations may reclaim input VAT on clothing provided as gifts to staff. To retain the VAT recovery, though, the value of such gifts should not exceed £50 per employee within a 12-month period. This is in line with HMRC’s business gift rules.

Don’t let your VAT claims fall apart at the seams

Claiming VAT on business expenditures can be difficult to navigate. The VAT team at Shorts has decades of experience in the VAT sector and can advise on your unique business circumstances to ensure you’re compliant with HMRC. Contact our team for a free consultation.