As those of you who have given my some very useful advice already will know I am currently know I am leaving
my FD role to return to practice by setting up my own specialised accounting practice. As I have strong links into the local leisure
sector I have been approched by several Bar/Restaurant operators to take over their affairs with a mixture of compliance and specialist consultancy work. On the back of this I have been introduced to several Lap Dancers who want me to deal with accounts and Tax affairs for them. Apperently they approached 4 different
Accountants the previous January who refused to do the work on Moral grounds. The way it works is they pay £70 per night to the bar operator to work there and they keep everything they make. Or you can opt out of the £70 and pay a fixed percentage of your total earnings. On some nigths they can take £1500 in cash. many of them only do it part time to support studies, (they claim they leave University debt free), or by working full time they can earn £50k to £60k. Most of them only do it for a few years and so I am assuming declare nothing and they never show up on HMRC radar. The girl who came to see me has been doing it for a few years and has obviously earned some decent money (had a brand new X5) and is getting worried she will get a knock on the door so is wanting her affairs brought up to date, along with most of the other girls she works with as they all share her concerns but cannot get anyone to do it. I am not sure what the other accountants objections were, other than maybe he didnt want his waiting room full of strippers. I must say when I was doing my CIMA exams 20 years ago that I didnt think 20 years later I would be preparing accounts for local strip joint. As far as I am aware its not illegal and the girls dont get paid for anything else other than dancing, but I am concerned that no one else will touch them. There is 15 of them in total and judging by the hourly rate they earn I cannot see my fees being an issue, my concern is that if I dont sort out then no one else will and the earnings will go untaxed for another year. So should I take the appointments or not. Also has anyone ever prepared accounts for the Lap Dancing club as I would imagine the books must have more holes in them than Newcastles Defence at present and that HMRC would have a field day with all these rents and commissions received, and surely the bar operator would be under pressure to disclose those working there. I would also imagine that some of the Girls should be VAT registered or that the Bar should pay VAT on the earnings they earn not the rent they pay. I am sure there are test cases involving Stringfellow and China Whites but would happily like to hear from anyone who has been involved in this sector before.
Ps. 1 requires a mortgage reference also ??? What is her trade.
PPS Dont mention any of this to my wife.