Is this a benefit?
Clothing provided for an employee by an employer is an employment related benefit within section 201 ITEPA 2003
However, If the employer provides a uniform with the company name on it, this will not be a benefit in kind, as long as every item of clothing they provide has the company name/logo permanently fixed and outwardly visible on it. For example, if it were a 3 piece suit, there would have to be a permanently fixed and outwardly visible logo on the trousers, the jacket, and the waistcoat.
I consider that in the particular circumstances they have described, HMRC would accept that there is no benefit in kind on the T-shirt and sweatshirt provided, as long as the company name is permanently fixed and outwardly visible on them.
If the employer also pays the employee to wear that clothing, this will be pay from the employment. She will be receiving this money by reason of her employment . This will be earnings within Section 62 of ITEPA 2003 and should be included in the payroll in gross pay for PAYE tax and Class 1 NIC (employee and employer) purposes. They could gross the payment up in the payroll, so that the employee comes out with a specific amount after PAYE tax and Class 1 NIC deductions.
If they were sponsoring the championships as a whole or sponsoring the whole team, they could argue that it was not earnings by reason of the employment. However, in this case, they are only sponsoring her because she is an employee.
HMRC’s guidance on clothing provided to employees is at EIM32401 starting at EIM32450.
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