The Guardian today reported a story that ABBA dressed in their outrageous stage attire for one reason; to save tax. Under Swedish tax law, the fact that the famous outfits were strictly for stage use only (they would look ridiculous wearing them on the street), allowed their cost to be deducted from the band’s earnings and reduce their tax bill.
Similar rules apply under HMRC legislation in the UK. When clothing is purchased ‘wholly and exclusively’ for business use, the cost of the clothing can be deducted against earnings, resulting in a lower taxable profit and a lower tax charge.
This applies to uniforms and protective clothing, but excludes clothing such as suits, shirts and ties which although are required for professionals to maintain appearances, are not deemed a requirement of the job. A nurse for example would be allowed the cost of their uniform as a deduction, as would protective boots and a high visibility vest for a construction worker. A shirt and tie for a solicitor would be deemed to have dual purpose and would therefore not be an allowable cost.
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