Stripper's naughty nurse outfit ruled as a legitimate expense

Kinky outfits can now be added to the list of wacky items that taxpayers can claim as a legitimate business expense.

‘Wacky’ but not unlawful -- at least for Gemma Daniels, a self-employed stripper who has been vindicated after her claim for her Naughty Nurse and Schoolgirl getups was contested.

A customs tribunal says a “heavy-handed” HMRC told the Stringfellows dancer that she should not have claimed for the outfits, because she could have worn them outside of work.

'Over the top'

HMRC also used ‘duality of purpose’ to fight her claims for hair extensions, false eyelashes, 10-inch heels and what she called “over the top” make-up. It all came in at £10,500 in relief.

Perfume, which Daniels also claimed in her nine-year stint at Stringfellows -- which ended in 2014 after she developed a “distaste” for her work, would seem to prove the Revenue’s case.

But she successfully argued to the tribunal that she did not wear perfume other than for her performances which, she candidly said, involved “getting naked in front of drunken men.”

So judge Gary Brannan heard and seems to have accepted that Daniels “did not want perfume to feature in her everyday life to remind her of her dancing job.”

'Not the correct test'

The perfume is reflective of the stance the judge took on her other claimed-for stage items, which extended to beauty treatments, waxing, fake tanning, lingerie and corsets.

“The fact that Ms Daniels could have worn make-up and the perfume outside her work is not the correct test,” he said in the tribunal’s judgment.

“Her evidence was that she did not do so and that she bought those items solely for her performances. We consider that she incurred the expenditure wholly and exclusively for the purposes of her performances and that it was therefore deductible.”

Daniels said that her accountant had advised her that keeping a cashbook to record her business expenditure was sufficient for tax purposes.

'Unhappy'

But she later fired that accountant because, despite initially agreeing with their suggestion to accept HMRC’s offer of a settlement following the enquiry into her expenses, she became “unhappy” with the accountant’s work. 

She also became unhappy with HMRC, which judge Brannan sympathised with, saying the “hard-nosed” Revenue enquiry inspector was “unreasonable” to decide to issue a Schedule 36 information notice.

“Daniels wrote to HMRC stating that she did not understand why her accounts should be questioned,” the judgment says.

“[Her new accountant] complained about HMRC’s conduct, claiming that HMRC’s conduct constituted ‘over-zealousness’ which amounted to ‘harassment’ of Ms Daniels.”

'Heavy-handed HMRC'

Judge Brannan, who agreed that the inspector was “heavy-handed”, observed that the letter was taken by the Revenue to signal that Daniels wanted to appeal.

But then siding with HMRC, the judge upheld penalties issued against her for ‘carelessness,’ tied to an associated claim she made for ‘home to work’ travel bills, which he disallowed.

Turning to the long list of cosmetic items she expensed, he ordered HMRC’s £10,500 bill to be slashed, saying her “appearance [was] critical to her earnings and indeed those of her engager.”

'Not everyday'

In rejecting the taxman’s duality of purpose argument, judge Brannan added: “Her appearance was a very important part of her role at Stringfellows.

“The costumes and dresses that she wore were not the type of clothing that would be suitable to be worn outside Stringfellows and she would not have wished to do so.”

His judgement, addressing her, concludes: “Uniforms, theatrical costumes and so on are allowable, not being deemed to be normal everyday clothing. You are an exotic dancer in a famous nightclub…[so you had] to be made up beyond what is appropriate in everyday use.”

During the disputed period, Daniels lived with her mother who was in ill health and slept in a room that doubled as her office. The former dancer currently lives in “straitened circumstances with an income of approximately £6,000 per annum.”