Are Clothing and Other Personal Attire Costs Tax Deductible?

When answering the question as to whether an expense is deductible for tax purposes, it is important to consider the following guidance from CRA:

No deduction shall be made in respect of an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property

 While this is quite clear for the majority of expenses – salaries paid to employees, office rent, manufacturing supplies etc. , there are a handful of expenses that are more ambiguous.  One of the more notable (and often asked) examples of this type of expense relate to personal attire including clothing, shoes and other personal maintenance costs (haircuts, beauty products etc)  Many business owners and self employed individuals are required to maintain a professional appearance when meeting with clients and as such incur costs relating to clothing and other accessories.  Unfortunately, the tax court of Canada has ruled time and time again that any attire or personal effects, that can be used in everyday life, regardless of whether you only wear that $1,400 business suit when meeting with your best clients, is NOT deductible (likely because taxpayers with regular jobs, who are not small business owners, are not allowed to deduct these expenses).  The only circumstances under which personal attire is deductible is when it relates to a uniform or special clothing:

An employee who is supplied with a distinctive uniform which is required to be worn while carrying out the duties of employment or who is provided with special clothing (including safety footwear) designed for protection from the particular hazards of the employment, is not regarded as receiving a taxable benefit. 

Payments made by an employer to a laundry or dry cleaning establishment for laundry or dry cleaning expenses of uniforms and special clothing, or directly to the employee in reimbursement of such expenses, do not constitute a taxable benefit to the employee.

Source: CRA

If the expense does in fact qualify as a distinctive uniform eg. coveralls with your company’s logo or a hazmat suit (chances are that you will not be wearing that to anything else except perhaps as a somewhat unimaginative Halloween costume), then you are allowed to deduct the total amount incurred.  For tax purposes the amount is treated as a capital outlay and included in Class 12 for CCA purposes.  Since the depreciation for this class is 100% (with no half year rule), there is no effective difference between deducting the full amount and including it in Class 12.

For further fun reading on the subject, below are links to Tax Court of Canada cases that specifically deal with the deductiblity of clothing, business suits, accessories and dress clothes:

Rail v. The Queen, 2011 TCC 130 (CanLII)

Relevant Excerpt:

“A certified financial planner, alleging that he needed appropriate clothing, tried to pass off as business expenses suits, ties, shirts and accessories bought at Ermengildo Zegna, an exclusive men’s wear shop. The expenses totalled over $6,000 in 1999 and $2,400 in 2001. “

The judge ruled that the expenses were personal in nature and added: “ Expenses relating to one's personal appearance are the very essence of a personal expense and involve choices made by a taxpayer in preparing him or herself for work. I conclude that the clothing in issue was used by the appellant as personal wear in everyday business and therefore its cost is not deductible.”

Mclean v. The Queen, 2009 TCC 509 (CanLII)

Relevant Excerpt:

“One can argue, for example, that "but for work, the taxpayer would not still require expensive dress clothes". However, in most cases, the manipulation can be easily rejected. Continuing with the same example, one can conclude that the expense of clothing does "not increase significantly" (Brooks, supra, at page 258) in tax terms when one upgrades a wardrobe. Alternatively, one can focus upon the change in clothing as a personal choice. Or, finally, considering that all psychic satisfactions represent a form of consumption within the ideal of a comprehensive tax base, one can focus upon the increased personal satisfaction associated with possessing a fine wardrobe.”

Rupprecht v. The Queen, 2007 TCC 191 (CanLII)

After considering all of the evidence and the submissions made by both parties, I am of the view that the clothing expenditures and software purchase by the appellant are personal expenses and therefore non-deductible in computing income from business. Clothing is prima facie a personal expense. This has been alluded to by the Supreme Court of Canada in the Symes decision at paragraphs 76 and 77.”

In all of the above cases, the tax court of Canada rejected clothing that could be used for other occasions as “the very essence” of a personal choice and therefore not a

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