Tax treatment of bank employees: uniformed employees: shoe allowances
Many uniformed bank employees are paid expenses allowances to cover the cost of shoes worn with uniform. Such allowances are paid by virtue of the employment and are taxable as earnings under Section 62 ITEPA 2003 (see Ferguson v Noble (7TC176), Corry v Robinson (18TC411) and Nagley v Spilsbury (37TC178)).
Where it is discovered that a bank is paying shoe allowances without deduction of tax the office dealing with the bank’s PAYE scheme should inform the bank of the correct treatment of such allowances. They should be included as pay on the deductions working sheets (or equivalent records) of the employees concerned and taxed under the normal PAYE provisions.