This guide explains your tax and National Insurance contributions (NICs) obligations if you provide or pay for clothing for one of your employees. These obligations differ depending on the type of clothing and whether you provide it directly or reimburse the cost to your employee of buying it. The guide also sets out the tax and NICs treatment of cleaning and repair costs for employee clothing.
On this page:
You give your employee either of the following:
Your employee becomes the owner of the clothing
For employees earning at a rate of less than 8,500 per year:
For company directors or employees earning at a rate of 8,500 or more per year:
How a dispensation can reduce your expenses and benefits reporting
For employees earning at a rate of less than 8,500 per year the value to use is:
For company directors or employees earning at a rate of 8,500 or more per year, the value to use is the higher of:
You make either of the following available to an employee:
For employees earning at a rate of less than 8,500 per year, you have:
For company directors or employees earning at a rate of 8,500 or more per year:
How a dispensation can reduce your expenses and benefits reporting
The value to use is the greater of
You give your employee money to cover the costs of necessary protective clothing or a uniform that can only be worn at work for carrying out their duties.
For employees earning at a rate of less than 8,500 per year:
For company directors or employees earning at a rate of 8,500 or more per year:
How a dispensation can reduce your expenses and benefits reporting
The value to use is the amount of money you provide to your employee for the clothing.
You give your employee money to cover the costs of cleaning or repair for necessary protective clothing or a uniform they can only wear at work for carrying out their duties.
For employees earning at a rate of less than 8,500 per year:
For company directors or employees earning at a rate of 8,500 or more per year:
How a dispensation can reduce your expenses and benefits reporting
The value to use is the amount of money you pay your employee.
You give an employee clothing to be worn at work other than necessary protective clothing or a uniform. Your employee becomes the owner of the clothing
For employees earning at a rate of less than 8,500 per year:
For company directors or employees earning at a rate of 8,500 or more per year:
For employees earning at a rate of less than 8,500 per year the value to use is:
For company directors or employees earning at a rate of 8,500 or more per year, the value to use is the higher of:
You make available to your employee clothing to be worn at work other than necessary protective clothing or a uniform. You retain ownership of the clothing.
For employees earning at a rate of less than 8,500 per year, you have:
For company directors or employees earning at a rate of 8,500 or more per year:
The value to use is the greater of
You give your employee money to cover the costs of clothing to be worn at work other than necessary protective clothing or a uniform.
These payments to your employee count as earnings, so:
The value to use is the amount of money you provide to your employee for the clothing.
You give your employee money to cover the costs of any non-durable clothing to be worn at work that isnt either necessary protective clothing or a uniform. Tights and stockings are an example of this kind of clothing.
Add the value of the benefit to the employees earnings when deducting and paying PAYE tax (but not Class 1 NICs) through your payroll.
The value to use is the amount of money you provide to your employee for the clothing.
You give your employee money to cover the costs of cleaning or repair for clothing other than necessary protective clothing or a uniform worn at work.
These payments to your employee count as earnings, so:
The value to use is the amount of money you provide to your employee.
Its important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of 8,500. For more information including details of whats included in the 8,500 threshold - follow the link below.
EIM32480: Upkeep and replacement of uniform and protective clothing
