Sunday, March 21, 2010

Why did the BBC's Sian Williams' appeal get to the Tax Tribunal?

Sian Williams, one of the hosts of BBC Breakfast has been in the news this week after it became apparent that she had a claim for tax relief in respect of clothes and hairstyling rejected by the Tax Tribunal.

Sian claimed that the items should be tax deductible because it was part of her job to look good on screen. Many of the media reports focused on one of the arguments used in case, that she would be prepared to read the news without clothes and only wears clothes because her employer requires it. As the Daily Express reluctantly notes however, "Mother-of-four Miss Williams has ...assured viewers that there is no danger of her actually presenting naked”.

Such claims for tax deductible clothing have long been a cause for dispute. One of the most famous cases involved a blonde Barrister (now Labour Peer), Ann Mallalieu and reached the House of Lords almost 30 years ago. She claimed tax relief for the black clothes that she was obliged to wear in court as she claimed she would never buy or wear such clothes for any other purpose. She lost the case because, the court ruled, the clothes were not purchased exclusively because she had to wear them in court, but also for the subconscious reasons of warmth and modesty.

We should bear in mind that Ann Mallalieu was self-employed and that Sian Williams was, in contrast, seeking to offset the cost of buying and laundering professional clothing etc against her employment income from the BBC. Thus her claim had to satisfy the notoriously restrictive test that the costs were involved “wholly, exclusively and necessarily" in the performance of the duties of her employment. As such her claim was almost bound to fail. As was the alternate claim being pursued that the clothes be treated as 'plant and machinery' qualifying for capital allowances.

Unsurprisingly the Tribunal first dismissed the claim for tax relief in respect of hairstyling. They noted that Sian did not have her hair done and coloured immediately before performing her duties as newsreader, and then changed back again immediately after finishing reading the news.

The failure of Sian's main claim was also quite predictable and one wonders who persuaded her that it was worth pursuing and on what grounds? Her situation was no different to many other employees (whether engaged to appear on TV or otherwise). There were not even any clear contractual obligations on Sian to acquire and wear a succession of appropriate outfits when she appeared on screen.

What do you think?


  1. She was not persuaded and she asked that it be dropped a number of times.

  2. Although I didn't actually follow the case in point, this is quite a thorny bit of legislation - and proves the point that in order for a system to run efficiently it needs to be govered by clear rules.

    In my opinion there is definitely a case for some items to be deductible, e.g protective clothing and "uniforms" which must be purchased at personal cost (e.g when specific types/styles of clothing are required and not provided by the employer).

    However, drawing a line between the latter and "everybody else" (e.g "I must wear a suit to work, therefore..") is somewhat tricky - which perhaps suggests there should be a more restrictive definition of what is/isn't deductible.

    It's clearly not in the taxpayer's interests for ALL clothing worn to work to be deductible, but then again, nor is it beneficial to us as a whole if there are protracted tribunals and/or appeals over a pair of pants.

  3. Am intgued by 'Anonymous' comment above suggesting that Sian asked for appeal to be dropped. Unclear if that's an informed view or speculation. Never heard of a case where taxpayer was unable to stop accountant pursuing an appeal before.

  4. Are you sure that Sian Williams is employed by the BBC. I read in the Daily Mail that she was a freelance.There is a world of difference between a barrister who can wear the same clothes dayn in day out and a TV presenter (particularly female) who has to have a varioety of clothing as it is on view daily.

  5. Certainly modern day presenters are encouraged to be 'flamboyant' (and vary their wardrobe) more than some of their predecessors 30 or 40 years ago. Therefore, accepting that the historical precedents for clothing tax deductions are very rigid, it is hard not to sympathise with the claimant in such a case.
    Assuming she is an employee (either of the BBC or of her own service company), an alternative would have been to purchase all clothing in the company's own name. If the clothing only had a short shelf life (and were commonly disposed of rather than kept long term by the presenter)I would have thought a pretty small benefit in kind charge could have been achieved?

  6. Most of my clients complain about certain things not being tax deductibe such as clothes or teeth whitening, and say that the tax rules are not fair.

    However, we all know that tax rules are not neceesrily fair, it is a matter of swings and roundabouts - you win some you loose some, and unfortunately the PAYE worker usually looses.

    Here in Ireland PAYE workers get a PAYE tax credit that is not available to the self-employed or proprietory directors, so they don't feel too badly done by (although they still complain)!

    I am just surprised that someone went so far considering the precedent already in place.

  7. @Anonymous
    I also had assumed she was freelance but checked before writing the blog post (unlike the Daily Mail it would seem).

    It is evident she was an employee from reading the tribunal decision.

    @TaxingTimes - my point exactly.

    Thanks to you all for your comments.