Are Uniform Allowances Taxable?

If your employees have a uniform that they’re required to wear to work, you may be wondering whether you’re entitled to any uniform tax exemptions.

The good news is that both you and your employees might be able to enjoy tax benefits. However, HMRC has strict guidelines on what qualifies as workwear, so you’ll need to make sure your bespoke uniforms meet the criteria before making any claims.

In this guide, we’ll answer the question ‘Are uniform allowances taxable?’ to help you determine whether you and your employees are eligible for tax relief. We’ll cover the type of uniform tax deductions that are available, as well as how you and your employees can claim.

Uniform tax exemptions for employers

According to HMRC, work uniforms that are clearly branded with your company logo are eligible for a tax exemption. This means that if you provide employees with branded uniforms, you won’t need to report these as a taxable benefit or deduct tax on them.

However, to qualify, the uniform must be distinctive and clearly associated with your business, such as clothing featuring an embroidered or printed company logo. This is because HMRC stresses that these garments can only qualify for tax rebates if they are exclusively for business purposes. Clothing that’s worn with detachable branding like a name tag will therefore still be taxed because that garment could be worn outside the workplace as well.

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 of 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 must also be branded.

At Murray Uniforms, we design, manufacture, and supply fully bespoke uniforms for a wide range of industries, including retail, transport, corporate, and more. If your current uniforms lack permanent branding, we can work with you to create a distinctive, branded uniform that reflects your values and is comfortable to wear – all using our data-driven Science of Uniform® approach.

Note: If your business offers laundry or maintenance services for work uniforms, these costs may also be exempt from tax.

How do I apply for a uniform tax exemption?

If you purchase, lend, clean, or repair qualifying staff clothing, use form P11D to report the expenditure as a benefit to the employee.

However, if your employees buy, clean, or repair their own qualifying staff clothing and you reimburse them, your expenditure is covered by an HMRC exemption and you do not need to report it. Instead, you must deduct PAYE tax and Class 1 National Insurance contributions as a benefit to the employee.

Uniform tax rebates for employees

Employees can also claim a tax rebate for uniforms or other work garments they’ve had to purchase, clean, or repair themselves, but only if all of the following apply:

• The uniform is distinctive and recognisable: The uniform must clearly identify the employee as working for the employer and feature permanent branding.
• Wearing the uniform is a requirement: The employee had no other option but to buy it, because the employer requires the uniform to be worn while working.
• The employee had to purchase, clean, repair, or replace the uniform themselves: They cannot claim if the employer has reimbursed them for the cost or provides facilities for them to wash their uniform (even if these have not been taken advantage of).

The standard flat-rate expense allowance for uniform maintenance is £60, which means employees claiming a tax refund on their work uniform will get back the amount of tax they would have otherwise had to pay on that £60. Basic-rate taxpayers will get 20% of £60 as a rebate, which is £12.

How do employees apply for a uniform tax rebate?

Employees can claim a tax rebate for their work uniform by filling in form P87 on the official gov.uk website.

Why is it worth investing in uniforms for your employees?

So far in this blog, we’ve established that having permanent, identifiable branding on your company uniforms is essential if you want to be able to claim tax benefits. But what other benefits are there to having branded work uniforms for your employees?

• Creating a good first impression: Did you know that it only takes customers 3 seconds to form an impression about your business? What’s more, research has shown that what your employees wear plays a huge role in this, with customers feeling more positive about businesses whose staff are smartly dressed in branded uniforms.
• Improving employee wellbeing: Our research with Coventry University found that a well-made, well-fitting uniform can make employees feel 22% happier at work. This means staff turnover is likely to be lower, saving you money when it comes to recruiting and training new employees. Customers are more likely to buy from happy, confident employees, too!
• Improving customer experience: Uniforms make your staff more approachable and productive and help instil trust in your brand. Customers are more likely to spend their money with companies that have smart, distinctive uniforms because of this.

Still need convincing? Explore Murray’s range of uniform case studies to discover how a new branded uniform has positively impacted some of the UK’s top brands.

Make a great impression with Murray Uniforms

From tax benefits to instilling customer confidence in your brand, there are plenty of reasons to consider designing a new branded uniform for your staff. At Murray Uniforms, our detailed Science of Uniform® approach takes every aspect of garment design into account to make sure we deliver a uniform that perfectly meets the needs of you and your employees.

With over 100 years of experience in garment manufacturing, we know exactly how to create the perfect uniform for your business that combines durability, comfort, and professionalism.

Book a consultation with our design team today, or get in touch for more information about our bespoke uniforms.

Uniform tax FAQs

Do uniform tax benefits apply to all professions?

No, uniform tax benefits do not apply to all professions. The uniform must be distinctive and mandatory to be eligible for a tax deduction, so it’s unlikely to apply to office workers, for example, who might wear business attire but not a specific branded uniform.

Professions that require a more specialist uniform, including ambulance staff and healthcare workers, are entitled to a larger maximum allowance. Check the full list of occupations to find out which are included and how much employees can get.

What kind of work garments are not eligible for a tax rebate?

There are some grey areas within HMRC’s definition, but generally, a uniform needs to be branded with your company logo to be eligible for a uniform tax exemption. This means employees being required to wear clothing in a specific colour, for example, would not qualify, even if they are corporate colours. Similarly, if an employee only wears a suit and tie at work, that would not meet HMRC’s criteria as it’s unbranded and could be worn outside of work as well.