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Money Matters: Self-Employment, Tax and Benefit Claims for Escorts

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Vivastreet Blog - Money matters self-employment, tax & benefit claims for escorts

We get asked a lot of questions about the legal side of escorting, but one thing that many escorts don’t consider are the laws relating to you and your earnings.

Here’s the lowdown on what the law says about you and money:

Benefits:

Like anyone else in (or out of) a regular job, you have certain benefit entitlements but for obvious reasons, most of them only apply if you’re on a low income. If you only work part-time and your income is under the benefit threshold then you, just like everyone else, can claim benefits.

Note: Some escorts have been known to claim benefits for the sole purpose of covering up their adult work. Don’t be tempted to do this for any reason; if the HMRC finds out you could find yourself in a lot of trouble.

Income Tax:

Let’s start by stating the obvious: nobody likes paying tax.

But, everybody likes having schools to send their kids to, social services to turn to in the event of a crisis and the NHS to lean on in an emergency, and income tax pays for those things.

If you earn money, either by working as a self-employed escort, by renting out a room or by getting certain state benefits (Jobseekers, Bereavement or Carers allowance or Incapacity benefit) then the law says you have to pay tax on it.

Currently, if you were born after 1948 – and we’re assuming that you all were! – then you can earn up to £10,000 each year, tax free. As soon as you earn more than £10k, you have to start paying tax on it.

On top of your tax, you’ll also need to pay Class 2 National Insurance contributions of £2.75 per week, but only if you earn more that £5,885 per year.

If you earn less, you can apply for an exemption certificate, but finding the money to cover Class 2 NI costs is worth it. The payments you make are what qualify you for the basic State Pension and some State Benefits should you ever need them, and failing to pay may mean losing your entitlement.

Completing Tax Returns:

“Tax doesn’t have to be taxing” – but anyone who’s completed a tax return will probably tell you otherwise.

Yes; all the forms and all the rules on tax are likely to cause you headaches, but getting into a flap over paperwork and enduring a bit of stress is worth it when you consider the penalties for not keeping your finances in order.

One London-based escort who failed to stick to tax rules found herself in court for non-payment and received a 16 month sentence and an order to repay £174,243 in unpaid tax and court costs. If she fails to pay it, she faces a further 2.5 years behind bars and on top of that, the situation ‘outed’ her to her family and friends.

The good news is that with a bit of organisation and practice, it is possible to do your returns yourself and if you really need help, then you can get some open-minded professional advice and support from Accountants4escorts.

Apart from staying on the right side of the law, another advantage of declaring your earnings is that you can put your cash into the bank and use it to buy property, cars or any other expensive items, legally.

But are your earnings legal?

The HMRC are not the police. They’re not really concerned with the ins and outs (so to speak) of how you earn a living, just that you pay your fair share of tax from it.

If you’d prefer not to put ‘escort’ as your occupation, put professional companion or masseuse instead and don’t forget to check out the things which are tax deductible; just like any other professional person, you can write off purchases that are necessary for you to work and that includes your business mobile and your sexy costumes or toys too.

You can find out more information about tax from reliable sites like Saafe or the HMRC, and get advice on almost any other escorting issue right here in the After Dark adult blog.

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