The Taxman Gets “Heavy Handed” with Exotic Dancer
21st September 2018
We talk a lot at RIFT about claiming expenses for the uniforms you wear for work. When you’re an employee, you can often claim tax relief against the cost of cleaning, repairing or replacing any clothes you only use for work.
But what if you’re self-employed and your job requires a different uniform every time you show up – a schoolgirl one night and a nurse the next? That’s the weirdly heated argument HMRC’s been having with Gemma Daniels, a former dancer at Stringfellows. Following the advice of her accountant, Ms. Daniels had racked up £10,500 in tax relief over 9 years for the essentials of her trade. We’re talking about specialised costumes, tanning sessions, make-up and so on. Apparently, the taxman didn’t think those costs were paid wholly and exclusively for the purposes of her job. For the most part, however he was wrong.
It started with a letter from HMRC, called a Schedule 36 information notice. It was basically a request for evidence to back up her tax refund claims. She’d kept decent records, but not decent enough to close the investigation. When the dust settled, Ms. Daniels was hit with a demand for over £10,500 in underpaid tax and penalties.
Rejecting an offer of a settlement (and ditching her old accountant), Ms. Daniels decided to get the whole mess straightened out in an appeal. HMRC’s position was simple – if slightly weird. The costumes, make-up and beauty treatments didn’t count as deductible expenses because they could be used outside of work.
You read that correctly. The taxman argued that see-through and skimpy, sequin-studded costumes and sexy uniforms provided enough warmth and decency to count as everyday clothing.
The judge in the case decided against HMRC, since a Stringfellows dancer’s appearance is absolutely central to their work. Therefore the taxman could no more claw back her refund than if she’d been playing a pirate in a pantomime.
Things didn’t all swing her way, though – and this is why it really does pay to get specialist help when you’re claiming refunds. As part of her expenses, Ms. Daniels had claimed for travel from home to work. The judge ruled that those expenses shouldn’t have counted toward her tax refund. Even so, the huge tax bill she’d been handed was stripped down and – for once – it was the taxman’s turn to be caught with his trousers down.
Whatever you wear for work, talk to us before you make a tax rebate claim. We’re the UK’s leading tax experts, so even if you take your clothes off for a living, you’re always covered with RIFT. Fin out if you're due a tax back today with our tax refund calculator.