It is not surprising that although more and more companies are discovering that corporate clothing and a corporate identity are universally recognised as a requirement for a modern and stylish image many procurement and personnel professionals are not aware of all of the tax rules regarding uniforms.
Many people are unaware that the Inland Revenue enforce a tax on ‘plain’ items of clothing that are issued free of charge to employees. Unless it is essential protective workwear, clothing issued free by the employer is considered a ‘fringe benefit’ to the employee as it could be worn outside of the work environment without being clearly identified as having been issued by the employer.
The tax liability of 20% of the cost price can be applied to either 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 and not all companies are aware of it, the rules generally only come to light on an inspection of a company’s books when invoices for staff clothing could be questioned. 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 obviously want their staff clothing to carry the company logo to enhance their corporate image and strengthen the brand but it is certainly something those responsible for purchasing should ensure that everything carries a permanently attached company logo.
Most garments can be embroidering or printing with your logo distinguishing garments as work wear as opposed to leisure wear therfore complying with HM Revenue regulations.
With brand image so important for companies today and with style of staff uniforms having developed significantly over the last few years. Companies must be aware of the rules to ensure that they and their employees don’t fall foul of the law.
