Expenses and benefits: clothing
Work out the value
The value of clothing for tax and reporting depends on whether you give or lend it and who initially pays for it.
Clothing you give to employees
Use whichever is the higher of:
- the second-hand value of the clothing when you give it to your employee
- the initial cost to you of the clothing
Clothing you lend to employees
Use whichever is the higher of:
- 20% of the clothing’s market value when you first provided it
- any annual rental or hire charges you pay for it
Clothing your employees buy and you pay them back for, or cleaning and repair costs
Use the amount of money you give your employee for the clothing, cleaning or repair.
Salary sacrifice arrangements
If the cost of the clothing is less than the amount of salary given up, report the salary amount instead.
These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.