A recent tax case had a couple of aspects that are actually of quite general use and interest when looking at Self Employed tax - even if you might think it unlikely that a case concerned with exotic dancing would be of relevance to you!
Gemma Daniels was (maybe still) is a dancer at Stringfellows. HMRC looked into her tax returns, and deemed that she'd inappropriately claimed tax relief for a) travel costs and b) clothing. The case went to a tax tribunal. The first aspect went the way one would have expected, but the second didn't necessarily do the same.
First, travel. Home to workplace travel isn't a deductible cost for a self-employed person, though travel from one workplace to another often is. Since the Dr Samadian case of a couple of years ago, it's become accepted that if you regularly travel somewhere to perform your main business activity, that's probably a home to workplace trip, and having some home office activity doesn't negate that. Dr Samadian regularly attended private hospitals on a regular timetable, and wasn't allowed tax relief for his travel costs - he had a home office where he did administrative work, but he didn't see patients there. Similarly, Gemma Daniels didn't dance for anyone at home, even though she did her admin there, she danced only at Stringfellows. Her travel costs therefore weren't allowed either. So far, so predictable.
The clothes claim didn't go exactly as expected though. The principal case on this since time began has been Mallalieu vs Drummond, where it was held that the formal clothes a barrister wore weren't claimable, because they were something that could also reasonably be worn in other contexts. In the case of Gemma Daniels, the judge was happy that the clothes she had claimed for were not clothes that would generally be worn in any other context - they were in the nature of a costume. In the case of some 10-inch heels that were in question, fair enough. But the judge was also happy that skimpy lingerie wasn't something that anyone would wear in a non-performance context. And that thick make-up, fake tan and hair extensions were similarly unlikely to be paid for by any regular person. Perhaps that's a reflection on the judge's life as much as anything!
So, although the travel point was as expected, and not in the taxpayer's favour, the clothing point offers some hope that "costume" might not have to be quite as outlandish as has generally been considered the case. Normal day to day clothing still isn't going to be claimable, though.
As a final point - HMRC had a second go at the clothing claim, claiming the lack of invoices and receipts made them inadmissible. It didn't. It would have been helpful if Gemma Daniels had been better at keeping proper records, but it hadn't been suggested at any point that she was being untruthful, so the judge allowed the claim regardless. Do try and keep receipts, but their absence isn't always terminal.
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