Claiming for business wear - why a pole dancer can, but a solicitor can't
Gemma Daniels was a self-employed exotic dancer who performed at Stringfellows nightclub in central London. HMRC assessed additional tax for the years 2010/11 to 2013/14 on the basis that she had claimed excessive business expenses. HMRC also issued a penalty under Schedule 24 FA 2007 on the basis that her tax returns for those years were carelessly inaccurate.
HMRC had won a similar case, in which a female barrister lost her claim for formal clothing (dark suits, white blouses etc) which she required so as to be allowed to appear in court. This has become the leading case on the subject, such that few tax agents these days would risk claiming for their clients’ clothes. Yet Daniels claimed a deduction for clothing (including underwear), cosmetics, shoes and hairdressing, and the judge granted her claim.
Why? The solicitor argued that her clothing costs were incurred “wholly and exclusively” for the purposes of her profession and that she would never have worn such clothes privately; she had genuinely only bought them in order to be allowed to appear in court.
But the House of Lords judged that she had a second (albeit unvoiced) purpose, namely that of warmth and decency. She had to wear something, and – never mind her preference not to – could easily wear the court clothing in private. Hers was, then a “duality of purpose”, and the “exclusively” test was failed.
In contrast, the type of clothes Daniels wore to perform at Stringfellows were “not appropriate to be worn outside that club”; they were “see-through” and “skimpy”. Most importantly, they “could not be described as providing ‘warmth and decency’".
This extended to her lingerie, which was “of a suggestive nature and… not suitable for use outside Stringfellows”. Her shoes included 6 to 10 inch high heels designed to grip a pole while hanging upside down from it during her act. The judge decided that, while the solicitor could easily have worn her court clothes in private life, Daniels could not have worn her dancing clothes outside the confines of the Stringfellows club. Hence there was no duality of purpose, and so the costs should be allowed.
The lesson? You're probably not going to be able to claim for clothing bought and used exclusively for work, unless it fails to keep you warm and decent, and can't reasonably be worn outside work....