Should I have a business bank account?

Most escorts probably don’t have a separate business bank account. Any income they bank goes into their personal account, and business expenses are either paid in cash or from the same account. I would recommend you set up a separate account for your business, and possibly a separate credit card for business expenses that you pay by plastic.

Don’t worry. I’m not suggesting you trot along to your High Street bank and fill in a form to set up a small business account in the name of “Jane Smith trading as BustyBunny of Bungay.” A name like that won’t fit on your cheque book and you don’t want to end up paying business bank charges.

What I suggest is that you get a second personal account and mentally designate it for your business. And if you pay for hotels and travel with a credit or debit card then get a second one of those too. All you need to do then is keep your business income and expenditure in these separate accounts. Then as your income starts to build up you can pay yourself from the profits by making a transfer from this business account to your personal account.

There are several advantages of doing this. First of all it separates your business and personal expenses and makes it much easier for you to keep track of your business transactions and make sure you record them all in your books.

But there is a more important reason. HMRC have the right to ask you to produce the records which support the entries you make on your Tax Return. If you have a separate business bank account then all you would have to produce to them is your business bank statements and your account book. But if your personal and business transactions all go through the same bank account you could be faced with sending in your personal bank statements, and then trying to convince the taxman that the £150 you received in August was from granny towards the children’s school uniforms, and £2,000 came from the sale of your boyfriend’s motorbike and not from an overnight.

What you are trying to do is protect yourself from the taxman’s attentions by having a set of books and records which are consistent with each other and don’t leave open invitations for questions to be asked.

Of course if you are subject to an in-depth inquiry then you may have to produce all sorts of personal records to HMRC but even then if you can demonstrate you are careful to keep business and personal transactions separate, you will be on much stronger ground than if everything is swilling around in the same account.