Are you the ‘face’ of your business. Or is your face actually your business?
If so, what appearance-related expenses are tax deductible, and which are not?
With increasing numbers of business owners gaining their income through being an on-screen influencer, YouTuber, vlogger or other ‘in front of a camera’ style roles, this is a such an important question.
It’s the same question that actors, stuntman, musicians and other stage performers have been asking for years – and the answers often surprise the business owners!
Other trades and professions often have the same question about their workwear. For example, a painter and decorator will want to know if they can deduct the many pairs of joggers they go through each year (as they end up being covered in paint!).
The basic rule on expenses
For an expense to be ‘tax deductible’ it must be incurred ‘wholly and exclusively’ for the purposes of the trade, profession or vocation.
You can see some common examples of this type of tax-deductible expenditure for the self-employed in a previous blog here.
Sounds simple right? It’s an easy rule, after all.
However, it’s taken years of tax court cases to really help give guidance to what is acceptable in the eyes of HM Revenue & Customs (and the law).
Bearing this in mind, you may think that you are incurring items ‘wholly and exclusively’. However, some claims often fail because they have an undeniable personal element to them, as we will explore below.
Let’s talk tax-deductible clothes
This claim is a very common mis-claim. Many business owners, with knowledge of the ‘wholly and exclusively’ rule, think they are correct in claiming their work clothes. Sorry, but this will not be allowable.
Clothes provide warmth and decency(!).
This is a key concept that dates back to a landmark court case in 1983 (Mallalieu vs Drummond). A self-employed lady barrister wanted to deduct her suit and wig for court.
The eventual outcome was that she was denied the ability to deduct the suit, as it failed the ‘wholly and exclusively’ test. The courts felt that while most professionals have to keep up their appearances and may have a ‘kinda’ uniform (the suit in this case), there was an “unescapable motive” that she needed clothing as human being.
It was established that the cost of clothing that could be seen as everyday wardrobe, would not be accepted as tax deduction.
The good news is it was also established that the cost of clothing that are not part of an everyday wardrobe are generally allowed as a tax deduction. This might include, for example, a nurse’s uniform, or specific protective clothing.
So where does this leave those paint-covered joggers? Sadly, not tax deductible.
What about medical expenses then?
Generally, medical expenses fail to pass the ‘wholly and exclusively’ test. Only in exceptional circumstances will these costs be allowed.
An example in recent years was a court case involving a stuntman, where the courts did actually allow the costs of a knee operation, and some follow up costs. This was due to “the special character dictated by the occupation”.
The court said in this particular case any private benefit was an unavoidable effect of the expenditure. However, the court still disallowed a lot of other general health and fitness expenses, despite a seemingly logical need for stunt professionals to be in top shape for their job!
It’s all about:
- What the expenditure is
- Why it was incurred,
- The nature of the job
- The timing!
HMRC give the following example in their manuals. If a professional athletic invested in some physiotherapy immediately before or after a specific event, this may be allowable.
What about other personal cosmetic work?
A common question we receive from influencers and entertainers is around cosmetic work – botox, teeth etc.
Generally these will fail the tests needed to be tax deductible, but HMRC note an example of where they would consider them:
“A radio performer of many years’ experience starts to do TV work. The performer is advised that their irregular teeth are reducing opportunities to appear on TV. The performer consequently elects to have cosmetic dentistry. It is established as fact that the performer had been content with their appearance, and the TV work was the sole purpose of the dentistry. The cost is allowable.”
Evidence is key, as is the nature of your business!
How about hair and makeup?
This question get a little more interesting, as some can be tax deductible.
- If you have stage costume/outfits or an exceptional type of makeup you can evidence is not everyday wear, you may be OK claiming these as expenses.
- It’s best to consider hair like the medical treatment examples.
Bear in mind what the haircut or restyle is for, and when you have it done. If you have a photoshoot, that is an event you can evidence that required one-off hair styling. So you are more likely to be OK to claim. Regular haircuts will be generally be a non-starter as they will fail the ‘wholly and exclusively’ test.
That said, one case in recent years involved a pole dancer. Her regular beauty appointments were allowed due the special nature of her job, AND the fact that when her job stopped, the expenses ceased. As was noted by the judge in the case, her work attire definitely did not provide ‘warmth and decency’… so was allowed as a tax deduction!
Our whole and exclusive summary (TL;DR)
Each piece of expenditure you are considering for a tax-deduction claim should be considered on its own merits and given situation. It’s not a one-size-fits-all rule, sadly!
Whatever you do, keep as much evidence as possible relating to your intentions and use of these types of expenses. Photos of you performing in outfits or a publicity shoot might be useful, for example.
If you don’t have an accountant, or feel you aren’t making the most of tax deductions for professional expenses with your current accountant, we’d love to help. Contact us to book a paid 1 hour, 1-2-1 consultation so you can ask about clothing and other potentially tax-deductible items. You don’t have to become a client, so it’s a great way for you to get the help, when you need it.