Personal Brands and Tax – what expenses you can and cannot claim

Personal Brands and Tax

Personal brands becoming increasingly important for all types of businesses and the individuals who run them. Business owners are increasingly curious about what they can and cannot claim in terms of expenses to keep them looking and playing at the top of their game.

According to Wikipedia “Personal branding is the conscious and intentional effort to create and influence public perception of an individual by positioning them as an authority in their industry, elevating their credibility, to ultimately advance their career, widen their circle of influence, and have a larger impact.”

So, if creating, elevating and sustaining your personal brand is directly responsible for the growth, profit or sales of your business, then anything you need to spend in order to stay looking great – hair, nails, teeth, clothes, make-up etc –  should be treated as a tax-deductible business expense, right?

Unfortunately not!

When HMRC’s guidance on what is or is not to be considered as a ‘tax-deductible business expense, there was no such thing as a career as an influencer, a YouTuber, blogger or vlogger. So you may be thinking that it’s about time the legislation moved on to keep up with the times.

But if you give it some thought, these are the same questions that actors, magicians, stuntmen, models and other entertainers or ‘celebrities’ have been asking for years. And as Einstein would say ‘asking the same question over and over again but expecting a different response is the definition of insanity (ad-libbing here, but words to that effect…)

What are the rules to consider business expenses as ‘tax deductible’?

In order to claim the tax back on business expenses, they must be ‘incurred wholly and exclusively in the performance of the duties of the employment,’ business or trade. The words wholly and exclusively are used by HMRC to avoid any potential deductions for expenses which serve dual purposes. The wholly and exclusively rule does not apply to travel expenses.

Clothes are of course one of the things we most often are asked about:

I only wear a suit for work – therefore surely it is a business expense?

Unfortunately, it doesn’t matter whether you exclusively wear your suit at work, HMRC is very keen to point out that at ‘the same time the clothing has the purpose of providing cover and comfort to the employee as well as the purpose of being suitable for work, and have case law and precedence to support and uphold this view (Mallalieu v Drummond [1983] 57TC330).

Surely there must be exceptions to this rule?

Yes, there are – claiming the cost of work clothing as an allowable tax-deductible business expense is allowed if the clothing is either a uniform or if it is protective, such as high viz jackets, steel toe-capped boots and logoed apparel.

Can hair and makeup be considered tax deductible?

Hair and makeup have a little bit of grey area around them, in that if, for example, you are having hair and makeup done exclusively for a show, a shoot or an advertisement for example, and it’s not the type of makeup that you would or could wear every day, then you may have merit in claiming these as tax deductible.

But regular haircuts, colours and general makeup would not be considered allowable.

What about medical treatments such as physiotherapy, botox, cosmetic surgery or dental work?

Again, this is a rising area of enquiry, and the same rules apply. Generally, HMRC will not allow costs to be claimed for work which you may have done anyway stating that we as agents must examine ‘whether one of the purposes in incurring those costs was to gratify their private wish to improve/change their appearance’.

However, there are a few exceptional circumstances where such expenses may be allowed.

As ever, keeping evidence and good records will be critical in your defence should HMRC ever choose to investigate, and in their business income manual on expenses and other entertainers they quote the following example:

A radio performer of many years experience starts to do TV work. The performer is advised that their irregular teeth are reducing opportunities to appear on TV. The performer consequently elects to have cosmetic dentistry. It is established as fact that the performer had been content with their appearance, and the TV work was the sole purpose of the dentistry. The cost is allowable

With regards to surgery to ‘restore function after injury, again this is generally not allowable except in exceptional circumstances such as the stuntman who was allowed to claim his knee surgery and follow-up treatment as a tax-deductible expense.

Surely photography is included as allowable?

Yes, photoshoots for your personal brand and to be used wholly and exclusively for the purposes of increasing your brand presence and your sales can be treated as tax deductible. Just be careful that you’re not choosing shoots of your children and pets to go on the wall as HMRC are likely not to allow these through!

Our featured image this week is of the lovely Ali Ford (other wonderful photographers also exist: Chelsea Shoesmith, Jordan Gurry and Adam Ward to name but three!), on one of her Manchester Subscription Shoots – please feel free to contact me if you would like an introduction to any.

As ever with HMRC, there are so many grey areas that we can never say one size fits all. If you feel that your expenses are wholly and exclusively for use in your trade and have no duality of purpose, please feel free to give us a call and we will be happy to guide you.

You can contact us via the website, or on 0161 4569666 – we look forward to hearing from you.

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