Do Any Self-Employed Farmers Claim for Wax Jackets

Just Wondering About the Tax Treatment of These and Similar (Protective) Garments

Didn't find your answer?

I know from past experience that an Inspector of Taxes deliberately disallowed a gardener client's claim on the basis that he may have used it for his paticular hobby, which was also outdoor-based.

Apart from keeping farmers dry, perhaps wax jackets also afford some protection against scratches from vegetation, farm anuimals and farm structures etc. I suspect that keeping a farmer dry does not of itself qualify the expense for a tax deduction, but am confused as to whether or not it is expenditure w & e incurred for the trade.

I am just intrigued to learn what accountants who have farm clients are doing with these sorts of clothing.

I know that latterly they have become fashion accessories, but suspect that was not originally the case.

I would also be pleased to learn of other traders who make claims for wax jackets or similar garments, especially those who have had run-ins with HMRC in this controversial area.

 

Replies (53)

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By Ardeninian
11th Apr 2024 15:23

The official position is from the famous Mallalieu v Drummond case, that this would have intrinsic duality of purpose and fail W&E, BIM37910.

I suspect many clients and agents have however put through clothing that would fail W&E if picked up - non-logo work clothes, non-PPE shoes and boots etc. Whether these do in fact get picked up is another question.

I think arguing a Barbour is protective clothing and not ordinarily clothing may be difficult to get through HMRC and the tribunal. But maybe a modern-day Mallalieu will step forward to try?

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Replying to Ardeninian:
By penelope pitstop
11th Apr 2024 16:12

Of course, the most famous Mallalieu v Drummond case would happen to have a dissenting judge, which does not really help to clarify the matter 100%.

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Replying to Ardeninian:
By penelope pitstop
11th Apr 2024 16:12

ditto

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Replying to penelope pitstop:
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By richard thomas
12th Apr 2024 12:20

The fact that there was a dissenting judge is wholly irrelevant. A 3-2 win in the Supreme Court or even a 1-1 win in the UT (chair’s casting vote) is as effective and precedent setting as a 5-0 win. The majority’s view is the law, the minority’s isn’t as I know from Donaldson.

The minority of 1 often gets their way in time - eg Duke of Westminster, Liversidge v Anderson. Both were 4-1 wins in the Lords, with the great Lord Atkinson dissenting in both. He was right.

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Replying to Ardeninian:
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By Justin Bryant
11th Apr 2024 16:27

That's one of the most misunderstood cases of all time of course e.g. see para 102 et seq here: https://caselaw.nationalarchives.gov.uk/ewca/civ/2024/330

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By vinylnobbynobbs
11th Apr 2024 15:27

Look at BIM37910 - Wholly and exclusively and Mallalieu v Drummond [1983] 57TC330.

None of my farmers claim

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Replying to vinylnobbynobbs:
By penelope pitstop
11th Apr 2024 16:20

I just don't get it.

Visualise a lonely sheep farmer, perched on a bleak, craggy hillside, carrying an open shotgun over the crook of his arm, raining absolutely stair rods, wearing wellington boots and wax jacket. perhaps a wet Lakeland location.

And he can't get a tax allowance for his wax jacket. But he can for his wellington boots. Part of my mind just cannot get it. Just like the dissenting judge in Mallalieu V Drummond.

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By Open all hours
11th Apr 2024 15:36

Always thought it would be useful to have a farming client with the surname Barbour so the jacket could then be recognised as branded. Hasn’t happened yet.

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Replying to Open all hours:
Intercity
By Mr Hankey
11th Apr 2024 16:38

LOL!

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VAT
By Jason Croke
11th Apr 2024 16:30

My initial thought is that waxed jackets are not PPE.

I've got a waxed jacket and use it for when I'm off-roading, but I've never considered it protecting me from accidents or danger, just rain, and my Mother always told me that I wasn't made from sugar.

Any claims involving clothing which has duality of purpose is always going to raise a question and divide opinion, so it'll be interesting to see how this thread pans out.

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By Tom+Cross
11th Apr 2024 16:31

And yet, these (https://www.arco.co.uk/Web-Taxonomy/Clothing/c/WEB_5?utm_) probably would be allowable?
Of course, a plethora of other suppliers will be available.

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DougScott
By Dougscott
11th Apr 2024 17:05

Presumably if you were a North Sea Diver a dry suit would be allowable - which stops you getting wet and cold and hypothermic.

So why can't a Farmer have a Barbour jacket to stop him getting wet and cold and hypothermic.

I've never really understood this duality of purpose nonsense, though I suppose it would be quite uncomfortable wearing a dry suit in the pub.

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By Roland195
11th Apr 2024 17:36

Be interesting to consider the outcome if Mallalieu Vs Drummond was heard in 2023 instead of 1983. Can't see it changing the position on the farmer's jacket though

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Replying to Roland195:
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By Justin Bryant
12th Apr 2024 12:29

I'm sure the judge would be waxing lyrical over it.

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By bettybobbymeggie
11th Apr 2024 18:11

Three quarters of my business is agriculture and frankly I'd allow a Barbour jacket in the same way I'd allow gloves, wellies, overalls, aprons & waders. Duality of purpose is a load of old tosh if you're a dairy farmer - your work clothes are permanently covered in cow sh*t so these clothes don't even come in the house let alone being worn socially. And I haven't found a farmer yet who considers a Barbour jacket a fashion accessory.

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Replying to bettybobbymeggie:
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By Tax Dragon
11th Apr 2024 20:50

bettybobbymeggie wrote:

...your work clothes are permanently covered in cow sh*t...

Those are special "work clothes" your clients wear when they visit their accountant.

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Replying to bettybobbymeggie:
By penelope pitstop
12th Apr 2024 03:45

Thank you.

That's exactly the sort of answer I was wanting.

Years ago, before I acted for the gardener client mentioned above, he was being interrogated (on his own) by an Inspector of Taxes. On discovering that the gardener had an outdoor hobby the Inspector refused the allowance of the gardener's wax jacket on the assumption the jacket was also being used for the outdoor hobby. The client insisted it wasn't being used for the hobby, but the Inspector would not budge and said it just had to have been used for the hobby.

Extrapolating that decision would mean that if a farmer admitted he enjoyed, say, grouse-shooting as a seasonal hobby, a ruthless Inspector would seek to disallow the wax jacket cost.

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Replying to penelope pitstop:
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By Tax Dragon
12th Apr 2024 08:04

Why are you extrapolating an irrelevant argument (indeed, not even the argument itself but the negative of that argument) from one Inspector of Taxes years ago that sets no precedent for anything while ignoring the decision of the HoL, apparently on the basis either that you don't understand it or because it wasn't unanimous?

Mallalieu didn't use her work clothes for a hobby. That wasn't relevant to the decision.

She also didn't claim the cost of new clothes, because that cost is capital. In Barbour terms, she claimed the cost of the rewax but not the cost of the original jacket.

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Replying to Tax Dragon:
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By bettybobbymeggie
12th Apr 2024 09:54

Tax Dragon wrote:
She also didn't claim the cost of new clothes, because that cost is capital.

Barbour jackets are fixed assets?!

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Replying to bettybobbymeggie:
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By Tax Dragon
12th Apr 2024 10:28

Ann Mallalieu also claimed replacements, so I think her starting point may have been that her 'wardrobe' was the asset, additions thereto were improvements, replacements repairs and cleaning etc general maintenance.

I apologise if I misrepresent her arguments, but one thing I do recall from the case is that she was not claiming the cost of buying the clothes, except as replacements. [Or at least I think I recall that, feel free to correct me if I'm wrong again.]

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Replying to bettybobbymeggie:
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By Bobbo
12th Apr 2024 11:01

bettybobbymeggie wrote:

Tax Dragon wrote: She also didn't claim the cost of new clothes, because that cost is capital.

Barbour jackets are fixed assets?!

A cost being capital is not the same as it being a fixed asset.

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Replying to Bobbo:
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By More unearned luck
12th Apr 2024 11:53

"A cost being capital is not the same as it being a fixed asset."

If the cost of the clothing is above the business's de minimis for not capitalising, where would you post the debit? The HL in Mallalieu was not construing GAAP, so provides no justification for the answer 'drawings'.

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Replying to More unearned luck:
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By 17RDR12
12th Apr 2024 12:01

More unearned luck wrote:

"A cost being capital is not the same as it being a fixed asset."

If the cost of the clothing is above the business's de minimis for not capitalising

Have you seen the price of a Barbour jacket lately??

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Replying to 17RDR12:
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By Open all hours
16th Apr 2024 08:48

I used to think they were expensive. Then I saw the programme of what went into making them and I now wonder how they do it at the price.

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Replying to bettybobbymeggie:
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By JB101
12th Apr 2024 17:00

Belts are waisting assets!

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Replying to bettybobbymeggie:
paddle steamer
By DJKL
15th Apr 2024 10:11

Only once they get old enough and lose their flex. When the jacket ,when buttoned will stand upright in a corner by itself with no assistance, then it is a fixed Asset.

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Replying to bettybobbymeggie:
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By gillybean04
12th Apr 2024 13:48

Mallalieu v Drummond wasn't duality of purpose because she could have also worn the clothes socially when she wasn't working though. It was because whilst wearing them for work purposes it was also serving the personal purpose of preserving warmth and decency.

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Replying to gillybean04:
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By 17RDR12
12th Apr 2024 14:07

gillybean04 wrote:

Mallalieu v Drummond wasn't duality of purpose because she could have also worn the clothes socially when she wasn't working though. It was because whilst wearing them for work purposes it was also serving the personal purpose of preserving warmth and decency.

Is that not true of every item of clothing?

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Replying to 17RDR12:
Northumberland flag
By MJShone
12th Apr 2024 14:36

Possibly not. There are items of protective clothing, for example. There are also what might better be described as "props" as in Gemma Daviels TC06640.

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Replying to MJShone:
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By 17RDR12
12th Apr 2024 14:47

Does protective clothing not provide warmth and decency then?

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Replying to MJShone:
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By Tax Dragon
12th Apr 2024 14:52

And I should imagine no-one would raise an eyebrow about deducting the cost of the overalls the farmer actually wears when mucking out the cows - and which they are unlikely to wear when visiting the accountant.

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Replying to 17RDR12:
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By More unearned luck
12th Apr 2024 19:57

"Is that not true of every item of clothing?" Yes, which is why the case was wrongly decided. A blazer with the business's crest on it provides the same warmth as it did before the badge was sewn on.

My understanding is that the HL bottled it; they feared that if they dismissed the IR's appeal, almost all taxpayers would put in claims for relief, giving a big hole in tax receipts.

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Replying to More unearned luck:
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By Tax Dragon
12th Apr 2024 21:51

Did HoL mention crests and badges? I remember reference only to nurses' uniforms.

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Replying to Tax Dragon:
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By More unearned luck
15th Apr 2024 21:44

Probably not, but so what?

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Replying to More unearned luck:
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By vstrad
15th Apr 2024 10:09

It's part of the HoL/SC's remit to take account of public policy considerations.

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Replying to bettybobbymeggie:
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By Justin Bryant
12th Apr 2024 15:33

You're arguably right, as the taxpayer's argument in Mallalieu was that she would not buy the clothes for normal (i.e. non-work) wearing, but the judges found that that did not mean that others wouldn't (i.e. the taxpayer's argument was just based on her particular taste basically and so was pretty weak). Whereas (pretty much) no-one would buy industrial strength wellies or whatever for normal wearing, notwithstanding they provide warmth etc.

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Northumberland flag
By MJShone
12th Apr 2024 11:50

I once persuaded what was then the Inland Revenue (before self assessment too) that the cost of a fishmonger client's jeans and sweatshirt were allowable. It's so long ago that I can't remember the details, but the argument was something along the lines that the clothing protected him from mess and smell. No matter how much they were washed, they were never going to be something he could wear outside work.

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Replying to MJShone:
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By Tax Dragon
12th Apr 2024 12:29

Cost of jeans and sweatshirt 2s 7d, tax saved 8d, accountant's fee £5.

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Replying to Tax Dragon:
Northumberland flag
By MJShone
12th Apr 2024 12:51

ROFL! No - I'm not quite old enough to have been in practice in those days (but nearly!).

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Replying to Tax Dragon:
paddle steamer
By DJKL
15th Apr 2024 10:12

Fee in guineas.

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Replying to DJKL:
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By MJShone
15th Apr 2024 10:38

Just about!

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By More unearned luck
12th Apr 2024 12:43

1) Ann Mallalieu got no relief because her clothing provided warmth and decency.
2) An actress playing a barrister on stage wearing the same sort of clothing as Ann would get relief (assuming she maintained/replaced the clothing at her own expense).

Why is the warmth and decency in 2) merely incidental, and thus no bar to relief, but not so in 1)?

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Replying to More unearned luck:
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By Justin Bryant
12th Apr 2024 16:10

A good point, but a judge could readily distinguish that on the facts by saying the general rule in Mallalieu would be unworkable if it disallowed an actor's attire (as you'd have to consider if the actor's garb could be worn normally or not by others on a case by cases basis and that would be just crazy e.g. some people are undoubtedly happy to dress normally like Sherlock Holmes or Worzel Gummidge or whatever). Tax legislation must be interpreted so that it is workable. See para 80 here: https://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j12683/TC...

Almost certainly HMRC would not take the point in practice anyway.

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Replying to More unearned luck:
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By Michael Davies
15th Apr 2024 10:32

More unearned luck wrote:

1) Ann Mallalieu got no relief because her clothing provided warmth and decency.
2) An actress playing a barrister on stage wearing the same sort of clothing as Ann would get relief (assuming she maintained/replaced the clothing at her own expense).

Why is the warmth and decency in 2) merely incidental, and thus no bar to relief, but not so in 1)?


Remember when Sian Williams threatened to appear on the BBC AM,naked because she could'nt obtain tax relief on her dresses ? I am still waiting.
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Northumberland flag
By MJShone
12th Apr 2024 14:26

Contrast Mallalieu v Drummond (HL) with the case of Gemma Daniels TC06640 (FTT). The warmth and decency argument wouldn't fly in the latter case.

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By JD
15th Apr 2024 10:03

In my humble experience, the average farmer would have at least two at any time.

The newly acquired jacket will be for personal appointments, holidays and high days, auctions and farm sales, replacing the previous jacket, which after a year or so use would be starting to get a little shabby, but would continue its life on the farm (at this stage very much as protective clothing).

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Replying to JD:
paddle steamer
By DJKL
15th Apr 2024 10:14

So, before it evolved into its latter state it was used by the farmer in its former state.

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Replying to DJKL:
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By JD
15th Apr 2024 11:28

Exactly, so very unlikely to fit any particular tax case of choice.

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Replying to JD:
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By Tax Dragon
15th Apr 2024 12:41

You mean they have dual purpose? Who needs a tax case to resolve that (non-)difficulty?!

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Morph
By kevinringer
15th Apr 2024 10:56

I act for farmers and can't recall the last time one of them bought a wax jacket. I mainly see purchases of overalls, wellies (usually safety) and waterproofs. Compared to a Barbour, these waterproofs are generally cheap and are only worn whilst on the farm because they get damaged and mucky very quickly. Some of our farms have two washing machines: one for farm workwear, and one for everything else. Generally I'll put these items through.

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