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Lap Dancers a Morale Dilema

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.

Replies

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07th Jan 2013 15:14

Morales don't pay the mortgage

Take the job; you're not doing anything wrong

 

And if you really don't want them, I'll happily take them for you and give you an introducers commision

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By occca
07th Jan 2013 15:13

No issues here

We have a few clients in this and similar trades and we would be more than happy to deal with them.

Yes they deal in cash, so there is a higher risk of ML, but other than that no issues as far as I'm concerned.  They are just doing a job.

If you do decide not to take them on then I would be happy to do them for them

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Have I been hibernating for three months?

Is it the 1st of April already?

Why would anyone not act for them on moral grounds?  Sounds a bit fishy to me.

There's a VAT case for Spearmint Rhino (circa 2008), and the lap dancer at Stringfellows that was claiming to be an (unfairly dismissed) employee was recently held to be self-employed.

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07th Jan 2013 15:16

Agree with steve McQueen 

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By Glennzy
07th Jan 2013 15:37

This is a genuine post

Thanks for your replies I am going to give a whirl at least the client interview will be more interesting than the standard poor weather or state of the economy.

Steve I am not sure I will get them all done this month so may need a hand as i think most have 2/3 years accounts to do.

It never ceases to amaze me how slack the leisure scene is from a compliance point of view.

I have met half a dozen local DJ's in same boat, they only work if paid cash some earn £2k to £3k per week, I advised a bar client of mine to only pay them on presentation of an invoice and the kid wont work there anymore now. Its easy money though this is where your fixed fee compliance work comes in, sign one up and you get their pals follow them on.

The people who turned them away where 4/5 partner firms who see themselves as alternatives to the Big 4 and one said " they did not meet the client profile" so would not sign them up.

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07th Jan 2013 18:18

Fitting the client profile

I did hear a while back that one well known firm will not take instructions to act for convicted defendants (i.e. criminals) because it does not want to be associated with them.

But the fact is that anyone going through the criminal justice system needs professional assistance - and that includes those who have been convicted and are then subject to follow-on proceedings such as confiscation.

I don't have a moral (or morale!) problem with that. 

For the same reason I would not have a moral problem with preparing tax returns for these ladies (and gentlemen?) if I were an accountant who prepared tax returns for clients (which I am not).

Dare I say, you will need to keep a close eye on their figures?

David

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By Locutus
07th Jan 2013 19:42

Morality
Come on guys - there's a huge moral issue here: taking on new self employed clients in January.

I never, ever do it!

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07th Jan 2013 21:07

check the Quashie case

just decided by the supreme court

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07th Jan 2013 22:36

Well this post is crying out

for some animated dancing girls

but that might offend

so a dancing duck instead, which should excite one member

 

 

 

 

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07th Jan 2013 22:42

I don't think you should be too concerned

"but I am concerned that no one else will touch them"

 

:-)

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07th Jan 2013 23:04

The arrangement seems a little like self employed hairdressers and rent a chair re VAT / self employment status.

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By mark22
07th Jan 2013 23:34

Lap dancers

I have dealt with the affairs of some in this sector and they usually say they are nail bar girls or some such.  I have also dealt with HMRC on one client's behalf and the two lady VAT inspectors new exactly their trade-tax is tax. Just cross the T's and dot the I's a little more carefully.

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07th Jan 2013 23:51

Nail bars can be a very dodgy area. I would suggest you proceed with more than usual caution in dealing with a business which describes itself as a nail bar - particularly where there are (or may be) significant cash 'takings' which might actually be derived from drug trafficking.

(There are of course some nail bars which are perfectly legitimate businesses.  If you actually visit the premises during working hours you will soon get an impression as to whether the business is legitimate or just a front for money laundering.)

David

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What the hell ....

is a nail bar!?!?

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08th Jan 2013 09:08

Nail bar NAIL BAR!

Steve Holloway wrote:

is a nail bar!?!?

Clearly you have never watched Eastenders (or Harry Hill :) )

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By mrme89
08th Jan 2013 09:49

Nail Bars

Talking of nail bars - my (ex) next door neighbour bought his girlfriend a nail bar, I wonder why?

It was amusing for the neighbours in a small village watching a police raid on a Sunday afternoon :)

 

http://www.thetelegraphandargus.co.uk/news/9720389.Company_boss_found_with_machine_gun_in_arms_stash/

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08th Jan 2013 09:58

Steve, you could have yours done . . .

Source: polishartaddiction.blogspot.com via Pascale on Pinterest

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By Old Greying Accountant
08th Jan 2013 10:07

Don't get moral ...

... confused with legal, morals are very subjective.

What is the problem with the description, surely "dancer" or "professional dancer" would suffice?

A nail bar is where chavs go to have tacky false nails stuck of their fingers under the mistaken apprehension  it makes them look glamourous and sophisticated, rather than the actual appearance they achieve of cheap and tarty, but then ...

EDIT: as illustrated by David as I was typing!

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08th Jan 2013 13:06

Have acted for many girls in this sector

They are self employed dancers.

Many clubs operate house fee deductions and then a % split on the income but they do vary from club to club.

 

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Moral dilema?

Go on my son!

Or as Paddy MGuiness would say:

'Let the burger see the buns'

Ahem...

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So ....

what on earth connects nail bars with havens for gun-runners and money launderers?!

I am only worried as I know my niece does nail-art, French manicure and hand massage (OMG!) and as her uncle (and accountant) I am clearly worried for the family reputation. She seems so sweet.

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08th Jan 2013 14:26

Nail bars and cannabis

Steve

There have been a number of cases of proceeds of sale of cannabis being laundered through nail bars.  One example of an case involving cannabis and nail bars is HERE (although in that case the court did not need to reach any conclusion as to whether the nail bars had in fact been used as a front for money laundering).

David

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08th Jan 2013 18:16

http://www.taxrelief4escorts.co.uk/

May also provide some relief

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08th Jan 2013 18:39

Mr Winches nails

If that is a picture of Mr Winch's nails I'm wondering what else he wears in court :)

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08th Jan 2013 19:06

excuse me

who let another mouse in?

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There is never one mouse ...

as any country dweller will tell you. Peanut butter is the solution at is acts something like Crack Cocaine to our twitch nosed friends. Sometimes I have caught 3 in the same (humane) trap and they won't stop eating the stuff long enough to even look at me!

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By Old Greying Accountant
09th Jan 2013 09:31

What do you do ...

... with them afterwards though Steve :o)

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By Glennzy
09th Jan 2013 20:04

As a bird breeder
I prefer to set the traps with chocolate spread its sends the little bleeders wild right until the trap snaps on their necks. The wife used to insist on a humane trap which you used to empty a few miles away which I am sure they used to beat her home.

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By Glennzy
09th Jan 2013 20:02

Am I missing something
Why is money laundering so readily associated with nail bars it's just a variation of a hairdressers or a tanning shop so why is that the preferred route for your bad boys.

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By Glennzy
09th Jan 2013 22:08

An update.
Well I met with the chief dancer tonight, most bizarre meeting ever. Her records are actual spot on.
She is signed up has even kept back a good part of her earnings to pay the tax. Not sure she will get away
With everything she wants claim as expenses though. Fake Tan, waxing, hairdressing, Vajazling but she has all the bills
To back it up. She is happy with my fee, so let the dog see the rabbit so to speak. She also said I will never have to pay for a dance off her if I am in the club.
(She will get tired before me).
Not sure how I will record the BIK on my tax return though.

Who said accountancy is dull.

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11th Jan 2013 09:17

i would claim for all the expenses for sure

enjoy!

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