Income

There’s not much difficulty in calculating an escort’s business income: it’s simply everything she receives, in the envelopes discreetly slipped to her, in exchange for her time and companionship (or whatever.)

If you work through a parlour the typical arrangement is that you receive the punter’s payment and then hand it all to the maid for safe-keeping. Then at the end of the shift you get back your share after the house percentage and the maid’s share have been deducted. Your income is the total amount initially paid to you by the punter, while the deductions for the house and the maid are allowable expenses. The end result is the same unless you are VAT registered or ought to be.

Escorts working through an agency usually get the full fee from the punter and then account to the agency for their booking fee. Again the total fee paid by the client is your business income, and the agency payment is an allowable expense.

Cash tips should also be included in your business income.

Payments in kind are included in business income but small gifts of things like flowers, chocolates, underwear or perfume would not normally be taxable. But they must be gifts and not part of the agreed fee. So announcing on your website that your normal fee is £300 but you’ll give a freebie in return for cup final tickets is asking for trouble. And large and expensive gifts (cars, boats, expensive jewellery) could raise a few eyebrows at the tax office. If you routinely sell all the gifts receive in e-bay I can see HMRC arguing the proceeds are part of your business income.

But beware. I know of one dominatrix who has a section on her website inviting worshippers to ‘adopt’ her household bills: council tax, TV licence, student loan repayments etc, all of which are listed in detail with amounts and in some cases the ‘name’ of the person who has adopted the bill. Without a doubt, that is going to be taxable.

Of course there is no problem with receiving hospitality as part of a booking. So you won’t pay tax on the cost of a punter buying you dinner, taking you to the opera or flying you both to Lapland to visit Santa.