Are evening dresses allowable?

Are evening dresses allowable?

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Our events team are required to attend our events and dress appropriately for the evening - which is usually black tie. Most of them are not highly paid and in the past have been given an allowance towards buying dresses each year. I suspect that these should be subject to PAYE and Class I NI - am I right? Or is there any way around this?

Additionally I'm now being asked if they can claim the costs of cleaning the aforementioned dresses e.g. one team member had red wine spilt down her by a client. I'm assuming that this will be taxable as well.

I'd be grateful if anyone has any advice on this.

Kate.
Kate A

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By AnonymousUser
08th Jan 2007 14:28

Probably taxable
If the allowance is in the form of a cash allowance then it will be PAYEable and NICable. What do you mean by highly paid? The Revenue still have the notion (although it is not described as such now) that someone earning more than £8,500 is a highly-paid employee. Should the employees be earning less than that, including the value of any benefits such as clothing, then it may be better for the employer to pay for the clothing, the benfit then being reduced to the secondhand value which in the case of clothing is usually next to nothing. Higher-paid employees will be assessed on the cost to the employer, but there would still be a primary Class 1 NI saving.

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By Paul Soper
09th Jan 2007 11:27

Higher paid?
Even higher paid employees would be better off if the garment remained the property of the employer - the benefit would then be 20% of MV and if thrown away after (say) 2 years the tax charge would be limited to 40% of MV. Obviously they should not buy the clothing from the employer or have it transfered to them as gift as they would then be taxable on the remainder of the MV minus any price paid. Remember the press interest in the suits owned by John Birt Enterprises when he was appointed BBC DG some years ago?

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