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A TAX CASE WITH A DIFFERENCE: Tax relief for travel costs and the cost of business clothing

15/02/2019

Usually a tax adviser’s professional life is focussed around old ‘dusty’ tax cases, but here we have an important tax case involving the entertainment industry; more precisely a professional pole dancer no less!

Older tax advisers will remember the case of the pop group Abba and the outlandish costumes they wore on stage to primarily ensure that the cost of their stage clothing was tax deductible i.e. the clothing was not suitable for everyday wear. This followed a famous tax case where a lady barrister claimed tax relief for the cost of her black clothing which she said that she only wore at Court proceedings. She lost the case as the smart black clothing was considered by the Judge to be suitable for her to wear in her life outside of the Court.

Pole Dancer Tax Case

Back to the pole dancer; apart from the obvious tabloid interest in the more salubrious details of the case, when the First Tier Tribunal (FTT) reported its findings, it showed them mainly supporting the tax relief for the cost of the dancer’s stage wear. However, there are more interesting tax relief issues following the decision by the FTT; firstly, the dancer’s claim that she was ‘working from home’ and so her travel costs from home to/from the club (Stringfellows) were allowable for tax was, not surprisingly, dismissed; the next HaesCooper Blog will be dealing with ‘the tax issues of working from home’. Secondly, the cost of the dancer’s exotic stage wear was allowed for tax including the cost of her perfume which she stated she only used at work, as in her personal life she did not want to be reminded by the perfume of her job!

Evidence to Back the Claim

A more serious tax point is that the dancer had only receipts evidencing approximately 10% of her total clothing/perfume costs claimed as business expenses and allowed as such by the FTT. This decision was primarily due to HMRC solely concentrating the FTT appeal on the expenses allowable for tax relief i.e. the deductibility point rather than the evidence for such expenses. We have to question; what message is this sending to other self- employed taxpayers?

How HaesCooper Can Help

Despite the above FTT tax case, we at HaesCooper still advise our clients to have and retain documentary evidence of business expenses to be claimed for tax relief, if and when necessary, as we have seen that in HMRC enquiries evidence is key in the decision around expenses being allowable for tax.

Please get in contact with a member of our team via email; info@haescooper.com or phone 01892 890099 for more information on tax relief claims or additional tax advice.