Share this content
0
3615

Black jeans as uniform? Wagamama minimum wage case

Can non logo clothes be treated as uniform for tax purposes?

Didn't find your answer?

Search AccountingWEB

Reading the Wagamama minimum wage headline http://www.bbc.co.uk/news/business-43332875 I can’t tell whether staff were taxed on the payments as a uniform allowance or they were treated as reimbursement of uniform. However the case seems to centre around asking staff to wear a particular colour or style of clothing is effectively creating a uniform, even though the items of clothing don’t have a logo and would previously be called dual purpose by HMRC.

Is this case likely to change the tax position? 

Replies

Please login or register to join the discussion.

avatar
09th Mar 2018 08:37

I agree, it does seem to imply that HMRC are making a point that non-logo’d clothes ARE uniform if insisted upon.

This clearly goes against everything I’ve been told & read on the subject (last year I did some research to see if my co could insist & pay for which clothes the directors must wear! Decided that I didn’t want to brand my suits/shirts/blazers etc ).
It would be interesting to hear what the experts make of this ... I may consider changing our clothing policy ...

Thanks (3)
09th Mar 2018 09:36

The only way that I could see it would not be taxable would be if an exemption under part 7A of the benefits code could be applied. This would require the expenditure being allowable under ITEPA s.336, in which case you would still have to demonstrate that it is incurred WEN in the performance of the duties.

I suspect that HMRC would maintain that the jeans are not a uniform, and that they serve a duality of purpose, and so are not an allowable expense, and the payment for them is a taxable benefit (or, if cash/wages - taxable via PAYE).

Thanks (1)
avatar
By rbw
12th Mar 2018 11:11

AIUI Wagamama's failure was that they did *not* pay a uniform allowance over and above the minimum wage. They just required employees to wear certain clothing. After deducting reasonable costs of such clothing from the pay the employees were left with a net rate of pay below the NMW. The employer could have avoided that NMW failure by (a) paying a specific allowance for clothing or (b) a rate of pay with sufficient headroom to cover the clothing. Either way as far as I can see there's no implication for tax.

I find it helpful to bear in mind that what is and isn't pay for NMW purposes is not and never was based on tax definitions.

Thanks (3)
avatar
By newmoon
to rbw
12th Mar 2018 14:09

Thank you RBW for the clarification. I've since had a look at the details here https://www.gov.uk/national-minimum-wage/worker-disputes-over-minimum-wage
I admit I found the language really hard to follow and had to work from the example to get a proper idea of what is and isn't included. So the Wagamama case centred on whether asking for black jeans to be worn was effectively asking for a uniform and the tribunal ruled that it was uniform.

Thanks (0)
avatar
By rbw
to newmoon
12th Mar 2018 15:23

I'm many years away from the details but personally always thought it better for NMW to think in terms of "dress requirements" rather than "uniform". That said, HMRC probably agree with you given their example 3 in https://www.gov.uk/hmrc-internal-manuals/national-minimum-wage-manual/nm...

"A hairdresser requires workers to wear a uniform consisting of any black trousers and any white tee shirt. Workers can purchase these from any shop. The cost of purchasing these items will reduce national minimum wage pay, since it is a specific requirement imposed on the worker by the employer."

It seems to me they could delete "a uniform consisting of" from that and so reduce the risk of confusion with the position for tax but what do I know.

Thanks (1)
avatar
By newmoon
to rbw
12th Mar 2018 16:23

Agreed. This could conceivably extend to other areas though, such as requesting presentable appearance or whatever could bring hairdresser/barber, dentist, soap (!) etc. costs as well as clothing into the calculation.

Thanks (0)
Share this content