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Are my work tools and workwear taxable expenses?

November 29, 2019

As a tradesperson, it can be difficult to know what you can and can’t claim as a taxable expense, which can be even more complicated depending on whether you’re a sole trader or a limited company. We don’t blame you, either: there are hundreds of items that can be claimed as a taxable expense, and figuring out whether wire strippers and glue guns are among them can feel a little daunting.

Thankfully, we’ve been helping people figure out what can be claimed and what can’t be for 10 years now, so let’s take a look at two of the most important areas where tradespeople could be saving money on taxable expenses – work tools and workwear.

The expenses test

HMRC’s key test when deciding whether an item is a claimable expense is as follows: can you prove that the item in question has been purchased wholly and exclusively for work purposes?

Let’s say, for example, that you buy a laptop through your business, and aren’t sure whether you can claim it as an expense. If you planned on taking that laptop home and giving it to a loved one for Christmas, you can’t claim it as an expense. If you took it to work and used it wholly and exclusively for work purposes – to send invoices, manage your accounts etc. – you can claim it. So, where does that leave work tools and workwear?

Work tools and workwear

Now that we’ve established HMRC’s test for what is and isn’t considered an expense, work tools and workwear suddenly fall into place.

If you’re an electrician and need to buy a specialist tool, such as a mains tester, this would count as a claimable expense if you were buying it solely for work purposes. The same would apply to any tool in any trade, such as hammers, screwdrivers, wrenches, cement mixers, knee-kickers etc.

work tools expenses

Workwear almost speaks for itself now that we know HRMC’s ‘wholly and exclusively’ test: it’s unlikely you’ll be wearing your work clothes out to a family get-together, after all. So, if you require high-vis jackets, goggles, gloves, work boots, tool belts etc., all of these items and more can be claimed as an expense. Other clothing can be trickier: a pair of jeans or a t-shirt is probably not a business expense, but work overalls or clothing branded with your business name would be fine.

There are still many other items that can be claimed as an expense, and we’ll be covering areas such as travel expenses and business mileage in our next expenses article, “Are travel and professional fees taxable expenses?”.

Don’t forget that if you’re looking for help with your accounts or need someone to help you keep on top of your expenses, Crunch offers a complete accountancy service with unlimited support for limited companies and sole traders, we can also help you if you need to manage Construction Industry Scheme (CIS) filing and payments.

You can also find us @TeamCrunch on Twitter, and on Facebook! You can also join our free self-employed community, Crunch Chorus, or join our Crunch Chorus Facebook group.

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