Sunday, 16 February 2014

Missing the Bigger Picture

From the Daily Mail

Now Swedish supergroup Abba have revealed they had good reason to wear such garish stage costumes – because it saved a little money, money, money on their tax bill.
The band, whose spangly flares, catsuits and platform heels were considered naff even in the 1970s, exploited a Swedish law which meant clothes were tax deductible if their owners could prove they were not used for daily wear.

Two odd things about this story

1) I'm pretty sure that a performer wearing a lounge suit could claim it as a business expense anywhere, as long as they only used it as stage wear.

2) At the time, Abba chose to stay in Sweden paying 70-85% tax on their very high earnings rather than clearing off to live in Las Vegas or Monaco to save lots of Money, Money, Money.


AVI said...

Stigler, (1) you'd have thought so, wouldn't you?
But IIRC, the Musicians' Union lost a case on this to HMRC; the MU arguing that classical musicians should be able to deduct their white-tie-n-tails outfits, and white tux's, and HMRC claiming that they were items of clothing one could wear in 'normal life' too, so it didn't count.

Mark Wadsworth said...

TS, yes, the story is nonsense.

AVI refers to cases such as Mallalieu v Drummond, Williams v HMRC, where is was decided, almost certainly correctly, that clothes you can use for every day wear as well are not tax allowable.

But the extra cost of having tax deductible spangly outfits made must, by definition, vastly outweight the value of the tax relief thereon.

If classical orchestras knew what they were doing, then it would be the employer himself who keeps a stock of suitable white tie and tails nonsense, and allows performers to use this for the evening of the performance.

In that case, there would be no taxable benefit in kind on the musicians and the cost of the clothing is clearly a business cost and hence allowable.

I do this for a living.

The Stigler said...


The HMRC advice includes the tails worn by a waiter, so yes, I can't see how musicians tails wouldn't also count.

Mark Wadsworth said...

TS, either AVI was correctly reporting the case law, in which case I offered a sensible solution, or he was incorrectly reporting it.

As you say, HMRC guidance strongly suggests that if stage garb is a certain level of un-everyday-ness, then it is tax deductible.

Suggesting that AVI threw us a pup.

Lola said...

Mind you, the blonde (female) one had a nice bum, and that's all that matters really...

Kj said...

Same problem applies for breast enhancements for glamour models. Are also "used" privately. I've heard both examples of someone getting the deduction and complaining about not getting it.

The Stigler said...


I think that's an important subject and I shall volunteer to HMRC as someone who should do the judging of it.

Kj said...

Stigler: my thoughts exactly. If in doubt, do a field-audit.