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Can gym wear be claimed for tax purposes?

Expert: Michael Fromstein

Sandra asked:

Can fitness instructors claim specific gym wear with their business logo?

Michael Fromstein answered:

There are a few answers to that question:

Instructor is employee of company (even if instructor owns the company):

CRA has confirmed that if an employer provides an employee with "a distinctive uniform which is required to be worn while carrying out the duties of employment" (IT IT-470R) is not considered to have received a taxable benefit with respect to the cost of that clothing.

There is no definition in the Act but CRA considers "where an employer requires an employee in the course of employment to wear a shirt that bears the employer's logo, the provision of such shirt or the reimbursement of the cost of such shirt is not regarded as a taxable benefit to the employee." (2007-0237891E5)

CRA has also said that employees can receive reimbursement for expenses to purchase 'uniforms' and the reimbursement would not be a taxable benefit. (2006-0168521E5)

Employees would be better off working without pay and receiving the clothing than working for pay, paying tax on the salary and then paying for the clothing.

Self Employed Instructors

CRA was asked, "whether a self-employed personal trainer can deduct the cost of specialized gymnasium clothing as a business expense." Their answer was: "a self-employed individual earning business income may be permitted to claim capital cost allowance in respect of certain clothing and costumes, provided they are usable only for business purposes. "For example, a wardrobe acquired by an artist specifically to earn self-employment income and which is used solely for that purpose, would be included in Class 8. Since gymnasium clothing is generally usable for personal purposes, the self-employed individual is not entitled to any deduction in respect of its cost in computing business income under the Act." (2004-0063131E5)

That does not mean that a judge would not permit a deduction for the clothing if the trainer could convince the judge that the clothing was so distinctive as to form part of a unique branding exercise. but you should know that CRA's administrative policy is not to allow the deduction.

About the author

Michael Fromstein is a tax specialist with Integrated Professional Specialist Services.

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