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Accounting for escorts?

When I say dealings I think it's obvious I mean on an accountancy basis and nothing else!

All of course hypothetical. For starters does the sketchy ground surrounding the whole subject put you off having them in your client list? Where would you draw the line on allowable/disallowable expenditure? General thoughts on the subject from a professional standpoint.

Interested to hear what people have to say!

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There is a chap I know...

... who specialises in accounts for Escorts. He is based in Liverpool. I'm not sure how open he is to publicity so I won't name him here, but if you want to PM me I'll pass on his contact details to you.

 

Steve

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Escort agencies

Good evening Steve,

I have been approached by an escort agency and wondered if you could provide the details of the practice in Liverpool which has experience in acting for escorts and escort agencies.

 

Thanks,

Mark

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According to Jolyon

Allowable expenses include

Uniforms... "(the pvc nun's habit and the traffic warden's rubber tunic) but not dresses and lingerie that you might wear outside work. And if you are a barrister, as well as an escort, you can claim for a barrister's wig and gown."

Expenses which are not allowed include:

Vibrators. "My careful observations strongly suggest there is a personal benefit to their use."

 

and NO, I'm not adding any other smileys to this one!

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Same as normal

Since they are quite old they will probably be quite cheap but a classic may be expensive.

 

Because of their age I imagine the emmisions would be quite high so they would go in the special pool , not in the general pool with newer models.

 

If it was a company there would of course be a benefit  , but even with the emmisions a low list price may make it a good gift for a son, or even the wife.

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Agree with MARKJET

MARKJET wrote:

Since they are quite old they will probably be quite cheap but a classic may be expensive.

 

Because of their age I imagine the emmisions would be quite high so they would go in the special pool , not in the general pool with newer models.

 

If it was a company there would of course be a benefit  , but even with the emmisions a low list price may make it a good gift for a son, or even the wife.

I agree entirely.  These younger, sportier models aren't all they're cracked up to be.  I'd definititely go for a classic, I prefer comfort and elegance to speed myself, but I do know what you mean about the higher emissions! :)

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Epic

MARKJET wrote:

Since they are quite old they will probably be quite cheap but a classic may be expensive.

 

Because of their age I imagine the emmisions would be quite high so they would go in the special pool , not in the general pool with newer models.

 

If it was a company there would of course be a benefit  , but even with the emmisions a low list price may make it a good gift for a son, or even the wife.

Epic post...  Just genius!

#Applauds#

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A memory from student days

Back in the late 60's early 70's there used to be a case quoted in text books.  

As I recall Inland Revenue as it was then were required to put a "reasonably accurate" description of the source of income on notices of assessment.  Apparently a lady was assessed as an "entertainer" for a considerable tax bill going back several years. 

She approached an accountant who wrote to IR pointing out the requirement to accurately describe the source of income, and stated that his client was a prostitute, not an entertainer, and if IR would like to ammend their assessment accordingly his client would be happy to pay it out of the fees she would receive for selling the story to the newspapers of how IR and the government were happy to be seen to obtain revenue from immoral earnings.

Apparently IR declined to ammend the assessment and the claim was quietly dropped :)

 

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I know this is upsetting but

I used to do the accounts of an 'magazine' author, who among her many other stories used to write the 'readers wives' stories for the top shelf mags!!

So sorry, but the stories are not true, I know it's difficult to believe, but it's time the truth came out!!

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Yes I act

I have some on my books and they are lovely clients to deal with. The usual "wholly and exclusively" applies. This BIM is relevant. http://www.hmrc.gov.uk/manuals/bimmanual/BIM50160.htm Based on this BIM re costume, I also disagree with Jolyon re lingerie bought solely for work (and often girls will keep work and personal clothes separate). I don't think the usual "warmth and decency" can apply!

@Mouse, I disagree with Jolyon on vibrators. If they were bought solely for work, I would allow vibrators and other toys/accessories. I enjoy my work (not sexually!) but I can still claim my calculator against tax. What's the difference? I'd be happy to argue it with an inspector. Jolyon's comments are here.

@Clegganator - what sketchy ground? The work they do is legal. It's just up to the morals/ comfort-zone of the practitioner as to whether they want to take them on or not.

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.

I would quite agree with Monsoon. We have an adult industry client who has the type of business model we like to work with, I dont care that what they sell is not the sort of thing you would discuss with your gran, its the same business model as many of our clients so happy to act.

I wouldn't generally be interested in an escort as we dont deal with cash trades. I might do it if it was high class/low volume all paid by credit card or bank transfer.

The main issue I have ever had is with my own staff. One simply didn't want anything to do with them, so I simply did the work myself when they were out of the office. Current assistant doesn't bat an eyelid.

Fundamentally you find yourself going giggly at the thought of discussing their tools of trade then dont take it on. They are not going to be impressed in YOU if you act like a 15 year old who has just found a used condom.

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Absolutely

ireallyshouldknowthisbut wrote:

They are not going to be impressed in YOU if you act like a 15 year old who has just found a used condom.

Quite. We are professionals and are supposed to act professional.

And that's why they like me. I've heard stories of accountants speaking very unprofessionally to these clients and it's just not on.

 

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Escorts

Re Escorts, I used to have a Sierra. Does that help? Nice motor for its time.

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How many?

I have to say, I am surprised that there are any "legit" escorts in terms of reporting tax etc.

 

I've always assumed, cash in hand and nature of the business = no tax. Obviously the agencies have to be above board but beyond that I simply never imagined many escorts doing SA100's - or in the case of duo's SA800's??

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Assumptions...

accountant_87 wrote:

I have to say, I am surprised that there are any "legit" escorts in terms of reporting tax etc.

I've always assumed, cash in hand and nature of the business = no tax. Obviously the agencies have to be above board but beyond that I simply never imagined many escorts doing SA100's - or in the case of duo's SA800's??

You know what they say about assumptions.

There are a lot of honest businesswomen around. Sometimes these businesswomen are escorts. Why do people assume that because of their business, there is implied an intrinsic dishonesty?

I'm beginning to see why escorts DIY their tax or very much go by industry recommendation for accountants.

 

 

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Not because of their business

Monsoon wrote:

accountant_87 wrote:

I have to say, I am surprised that there are any "legit" escorts in terms of reporting tax etc.

I've always assumed, cash in hand and nature of the business = no tax. Obviously the agencies have to be above board but beyond that I simply never imagined many escorts doing SA100's - or in the case of duo's SA800's??

You know what they say about assumptions.

There are a lot of honest businesswomen around. Sometimes these businesswomen are escorts. Why do people assume that because of their business, there is implied an intrinsic dishonesty?

I'm beginning to see why escorts DIY their tax or very much go by industry recommendation for accountants.

 

 

I think it's more likely to be because it is all cash in hand. I know other people work cash in hand but they usually miss out some of the cash received or if it's possible to claim benefits to cover their perceived lifestyle they may not declare they are in business.

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Assumptions

accountant_87 wrote:
I've always assumed, cash in hand and nature of the business = no tax. Obviously the agencies have to be above board but beyond that I simply never imagined many escorts doing SA100's - or in the case of duo's SA800's??

Would you apply that reasoning to anyone who works cash in hand and whose business is not readily identifiable by HMRC, or is there something else in the "nature of the business" that brings you to that conclusion?

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No Monsoon I don't think you're being fair.

 

I think these assumptions are, to some extent, justified.

 

And I would make the distinction between escorts and "escorts".

 

There are some women (and men for that matter) who sell sex and some who sell nothing more then genuine companionship to events etc.

 

I am not making a moral judgement on the former and in fact have had a very close family member been an escort in the past. But I just don't see how anyone's natural assumption would be that any escort / prostitute would be completing tax returns and to act like I am being prejudiced for this assumption is not fair.

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Prostitutes

accountant_87 wrote:
I would make the distinction between escorts and "escorts".... I am not making a moral judgement on the former.

But presumably you are doing so on the latter. Why judge the latter and not the former?

Prostitution is not illegal is it? I would treat them like any other client.

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WIP

Is it necessary to account for work in progress under UITF 40 if they haven't "finished the job" at midnight on 5 April?

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Taxation of proceeds of crime

One of the innovations introduced by the Proceeds of Crime Act 2002 was a mechanism by which SOCA can raise income, corporation or capital gains tax assessments on individuals and companies whom it has reasonable grounds to suspect have had income or gains from crime.

Profits and gains from crime have always been taxable but allowing SOCA to deal with the assessments rather than HMRC was seen to have some advantages.  The legislation is in Part 6 PoCA 2002.

I do occasionally get involved in such cases (but not usually involving any activity particularly glamorous!).

David

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I stll fondly remember ...

... my Mk 3 Cortina, far superior to the Escort, and more cool as the Sweeney used to drive them (and Granada's for the DI's), although I think Bodie had a Mk 3 Escort in The Professionals (there's a double meaning there somewhere I'm sure - lol!). 

EDIT: had to check, Doyle drove an RS2000, Bodie a 3.0S Capri - Ah the joys of rear wheel drive!

http://www.youtube.com/watch?feature=player_detailpage&v=nK7HApgcrcM#t=1s

 

 

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.

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Chatman, really?

When referring to the "former" I was referring to this sentance, the sentance just before!! :

"There are some women (and men for that matter) who sell sex and some who sell nothing more then genuine companionship to events etc"

Secondly, yes, the nature of the business does make me automatically assume that people who operate within it would not complete tax returns. I am not bigoted in anyway and again, I had a very close family member who was an escort. I know a lot people in this industry and whilst they are LARGELY good and upstanding members of the community they are sometimes either ignorant of the need to complete a tax return, make the assumption themselves that because of the questions they have themselves of legality of what they do they should not complete a tax return or yes, shock horror, don't want to complete a tax return because they just don't want to. Because sometimes they fund drug habbits. Because sometimes they are claiming benefits at the same time. Would I make moral judgements on such people? Given the people I know who are like this and their awful backgrounds I 100% would not.

Tell me, as a proportion of all escorts nationally, how many in your honest opinion complete tax returns? I would dare say not more than 10% if that.

Trust me - my views are not based on assumptions in the slightest. Take off your rose tinted glasses.

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Perhaps if more accountants appeared approachable and professional with regards to this industry, more escorts who don't currently do a tax return would seek professional advice? Just a thought.

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Why not?

Monsoon wrote:
Perhaps if more accountants appeared approachable and professional with regards to this industry, more escorts who don't currently do a tax return would seek professional advice? Just a thought.

I don't know of any accountant who would not be approachable and professional regarding any industry. It's another potential client after all.

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You'd be surprised then!

petersaxton wrote:

Monsoon wrote:
Perhaps if more accountants appeared approachable and professional with regards to this industry, more escorts who don't currently do a tax return would seek professional advice? Just a thought.

I don't know of any accountant who would not be approachable and professional regarding any industry. It's another potential client after all.

From what I have heard, there are plenty who are neither approachable nor professional. Or, if they are, they are still judgemental.

But I agree - they ought to be approachable and professional and as you and chatman rightly say, treat them as any other client from any other industry.

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Nonsense

Sorry, it's the fault of us bigoted unapproachable accountants that many of these people don't do a tax return. Nevermind the social reality to their situations.

Now whose making assumptions?

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capability

accountant_87 wrote:

Sorry, it's the fault of us bigoted unapproachable accountants that many of these people don't do a tax return. Nevermind the social reality to their situations.

Now whose making assumptions?

Some clients are not capable of doing a tax return and have to use a professional. This goes for all industries. We all have clients who just couldn't do it. That's what I meant. If someone could DIY their tax return but choose not to, or engage an agent, obviously that's wrong.

 

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That being said I would never condone any accountant acting unprofessionally towards any client of this sort.

But I do stand by my original conviction that I would not naturally expect many escorts to be completing tax returns.

A folly of my relative lack of experience in practise perhaps - but nothing to do with moral judgements. Please don't assume this of me.

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Nostalgia aint what it used to be

If only a certain Welsh gentleman were here he'd be trying to "rehabillitate" the young ladies of the night, giving them jobs preparing bank recs etc.

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Confusion

I think there is some confusion by some about how many register for tax.

I think you will find that those advertising and working as "escorts" and those working for "massage parlours" are registered as HMRC can trace them.

Those working street corners are more likely to consist of addicts etcetera and are not likely to be paying tax, although they are regularly arrested for soliciting so there is a record of them at the local nick, but I'm fairly sure HMRC have no right to access police records.

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Really?

@ John Paris So if you go on a website like adultwork.com with independant escorts - thousands of them - you can tell me for a fact they are registered with HMRC?

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accountant_87

accountant_87 wrote:

@ John Paris So if you go on a website like adultwork.com with independant escorts - thousands of them - you can tell me for a fact they are registered with HMRC?

 

I would suspect that if they are advertising then HMRC have probably traced them and they are probably registered, or will be once HMRC catch up with them.

Given HMRC's trawling of ebay I would be amazing if other potentially profitable sites haven't also been trawled, wouldn't you ?

As for "facts", I wouldn't know, perhaps a request to HMRC under the freedom of information act as to how many escorts are registered taxpayers might be interesting ?

 

 

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Not so amazing

John Paris wrote:

Given HMRC's trawling of ebay I would be amazing if other potentially profitable sites haven't also been trawled, wouldn't you ?

 

 

I think a lot of propoganda is put out about what HMRC have done, are doing and will do. They have to compromise severely what they would like to do with the resources they have available.

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Do HMRC have resources for this?

John Paris wrote:

accountant_87 wrote:

@ John Paris So if you go on a website like adultwork.com with independant escorts - thousands of them - you can tell me for a fact they are registered with HMRC?

 

I would suspect that if they are advertising then HMRC have probably traced them and they are probably registered, or will be once HMRC catch up with them.

Given HMRC's trawling of ebay I would be amazing if other potentially profitable sites haven't also been trawled, wouldn't you ?

As for "facts", I wouldn't know, perhaps a request to HMRC under the freedom of information act as to how many escorts are registered taxpayers might be interesting ?

 

 

 

I would just be very skeptical that HMRC have the resources to do this.

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The resources are there ...

accountant_87 wrote:

John Paris wrote:

accountant_87 wrote:

@ John Paris So if you go on a website like adultwork.com with independant escorts - thousands of them - you can tell me for a fact they are registered with HMRC?

 

I would suspect that if they are advertising then HMRC have probably traced them and they are probably registered, or will be once HMRC catch up with them.

Given HMRC's trawling of ebay I would be amazing if other potentially profitable sites haven't also been trawled, wouldn't you ?

As for "facts", I wouldn't know, perhaps a request to HMRC under the freedom of information act as to how many escorts are registered taxpayers might be interesting ?

I would just be very skeptical that HMRC have the resources to do this.

... i.e. a computer program that can trawl the internet, it is whether following up the data is worthwhile? May be matching to names to the condoms purchased on the corrosponding Tesco club card would allow profitable (in terms of tax revenue) extrapolation of income, allowing of course for private use!

As an aside, is trawling the internet for escorts classed as cyber kerb-crawling?

 

 

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Treat all industries the same?

I'm sorry, but we don't treat industries the same. Don't we treat them according to the perceived risk? A classic example being the construction industry.

That said there is no excuse for rudeness or unprofessionalism.

I client of mine whose business went down the drain turned to prostitution because she needed the money. That sort of decision should ring alarm bells about the risks the client was prepared to take. Later she was accused of blackmail.

The risks taken by a client are reflected upon the accountant, their practice and their livelihood. I don't condemn any accountant taking on such clients but I can understand accountants avoiding them too.

 

 

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Thats one for the philosophers!

andy.partridge wrote:

I'm sorry, but we don't treat industries the same. Don't we treat them according to the perceived risk? A classic example being the construction industry.

That said there is no excuse for rudeness or unprofessionalism.

I client of mine whose business went down the drain turned to prostitution because she needed the money. That sort of decision should ring alarm bells about the risks the client was prepared to take. Later she was accused of blackmail.

The risks taken by a client are reflected upon the accountant, their practice and their livelihood. I don't condemn any accountant taking on such clients but I can understand accountants avoiding them too.

 

By definition, by treating each industry on its merits and demerits, we are treating them the same, but the courses of action that treatment leads to may be different!

It is a bit like the fact nothing can be unique, as uniqueness is the commonality!

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Professional and polite

I've turned "certain industries" down - I just think shops are too much hassle given the people I have met. The people I have met have a lot of paperwork and they want to give it to an accountant and get charged a few hundred pounds to get it sorted out. I'd still meet anybody from any industry and see if I would be happy doing the work.

I would still be professional and polite whatever industry they were in.

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WAGS

andy.partridge PM | Thu, 01/12/2011 - 09:52 | Permalink

"The risks taken by a client are reflected upon the accountant, their practice and their livelihood. I don't condemn any accountant taking on such clients but I can understand accountants avoiding them too".

 

 

Once had a professional footballer's wife as a client.  He was great, lots of free tickets to big games etc, but she was a total nightmare - I'd certainly avoid footballer's wives. ""

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.

I wonder how these types of businesses pay their fees?

Has any ever been subject to audit? It would be great doing a "walkthrough" of the sales system.

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As long as ...

... they don't offer to pay in kind! (or do, what ever tickles your fancy :o) )

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Have put this on Time Out

But seemed relevant, a meeting of two cash based professions!

A young man and his date were parked on a back road some distance from town. They were about to have sex when the girl stopped.

"I really should have mentioned this earlier, but I'm actually a prostitute and I charge £20 for sex." The man reluctantly paid her, and they did their thing.

After a cigarette, the man just sat in the driver's seat looking out the window. "Why aren't we going anywhere?" asked the girl.

"Well, I should have mentioned this before, but I'm actually a taxi driver, and the fare back to town is £25..."

 

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This is now my favourite ever post on Accounting Web!!!! - Who says accountants are boring!!

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It's only the same as paying an accountant

Paying an escort is only the same as paying an accountant or any other "professional".

Each offer their time and expertise in the subject at an hourly rate.

I offer computer consultancy services and I charge an hourly rate.

I was once asked "what do I get for the £/hour that you charge"?, I explanied what I would do and then added "but I'll sweep the floor, make the the tea ar whatever you like, so long as you pay me for the time".  The client thought my answer was quite amusing and I'm still working for them 28 years later :-)

 

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boring?

Accountants? Boring?

Maybe . . . maybe not . . .

But there certainly seems to be quite a few prurient ones out there.

Judge not lest ye be judged!

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Of course some complete tax returns, otherwise they could not get a mortgage.

I agree with all you say in your early comment Monsoon about what expenses to allow.  I assume you would also claim for breast implants, as I have (for the client!).

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Boobies

jonsa wrote:

Of course some complete tax returns, otherwise they could not get a mortgage.

I agree with all you say in your early comment Monsoon about what expenses to allow.  I assume you would also claim for breast implants, as I have (for the client!).

If you claim for cosmetic surgery - see the BIM I linked early in the thread. You really ought to be able to *prove* no private use at all (i.e. that the person was thoroughly happy with themselves pre-surgery and only got it to enhance their work) otherwise there is an intrinsic duality of purpose. I did read an article on the subject where the author pondered the merits of claiming capital allowances on the implants themselves (not the full cost of surgery) as plant and machinery... Thoughts?

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Images

jonsa wrote:

Of course some complete tax returns, otherwise they could not get a mortgage.

I agree with all you say in your early comment Monsoon about what expenses to allow.  I assume you would also claim for breast implants, as I have (for the client!).

 

 

 

I now have a mental image in my head that I really didn't need.

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The oldest profession

or are we  ?

joke: Would you sleep with me for a million pounds ?

Yes !

Now we have established what you are can we agree a sensible price !

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