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Conwy

Talking With An Escort About Vat

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Dear all,

 

In some of a few moments of downtime while a lady I know well recovered her composure in advance of the next bout of activity, she mentioned the unusual subject of VAT.

 

It appears that there is a threshold of £78,000 of income, above which a WG needs to charge VAT at a rate of 12% on all of her income. This VAT is non-recoverable.

 

So, I just did some calculations and arrived at the following results, which are unattractive from the escort's perspective.

 

To take two examples.

With a gross income after deductibles of £75,000 the net income is £55,373.

With a gross income after deductibles of £150,000, the net income is £85,573.

 

On £75,000 the take-home is 74%, on the second £75,000 the take-home is 40%. OUCH! Screwed by the State.

 

C

 

 

 

 

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Dear all,

 

In some of a few moments of downtime while a lady I know well recovered her composure in advance of the next bout of activity, she mentioned the unusual subject of VAT.

 

It appears that there is a threshold of £78,000 of income, above which a WG needs to charge VAT at a rate of 12% on all of her income. This VAT is non-recoverable.

 

So, I just did some calculations and arrived at the following results, which are unattractive from the escort's perspective.

 

To take two examples.

With a gross income after deductibles of £75,000 the net income is £55,373.

With a gross income after deductibles of £150,000, the net income is £85,573.

 

On £75,000 the take-home is 74%, on the second £75,000 the take-home is 40%. OUCH! Screwed by the State.

 

C

the vat threshold is way too small

and there should be transitional relief for businesses just over the threshold.  the cliff of vat registrations must be stifling business.

 

but a wg who is vat registered can claim any VAT on her expenses as inputs reducing her tax bill.  but i don't spose this is much.

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The current threshold is £79,000.  The VAT rate would be 20%.

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The current threshold is £79,000.  The VAT rate would be 20%.

 

I can see why people would keep their turnover below £78,999

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The current threshold is £79,000.  The VAT rate would be 20%.

You can opt (with HMRC approval)to pay a flat rate on your income though, rather than accounting for all expenses individually - I guess that's where the 12% figure comes from?

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You can opt (with HMRC approval)to pay a flat rate on your income though, rather than accounting for all expenses individually - I guess that's where the 12% figure comes from?

 

You're absolutely right. The 12% rate would be correct.

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This thread makes me glad that all I talk about with the lady of my choice is "can we keep on doing this?".

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I can see why people would keep their turnover below £78,999

I run a small online retail business - I stop trading when my t/o goes to about 76K. I have worked out I would need to generate an extra £20K of t/o to pay the vat on my t/o

It's a shame as I can't let the business grow

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I promise on my mother's grave never to discuss VAT in bed with an escort!

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She raised the subject with me, asking for advice in a wider context.

 

I know that it might seem weird, but several escorts have asked me about many more off-beat issues than this.

 

With age comes apparent gravitas....

 

C

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She'd be better asking an accountant. General advice is to avoid going over the VAT threshold.

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The lady has an accountant.

 

She was enquiring about something else, wanting my view from a client's perspective, but the VAT issue was a part of the background explanation.

We have what I consider to be a very healthy (paid) relationship. We enjoy the bed part, treat each other with respect just as friends do, then go our separate ways until next time.

 

C

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But anyone that charges VAT on their own goods and services can then recover the input VAT they paid for goods and services; the difference is the value added. I am over the VAT threshhold and have to be registered as clients require it, but actually I recover VAT as income, because I spend so much time and bill so much time for working abroad. so I am a special case but the principle stands. Its more work, thats the main problem.

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It doesn't apply for the 12% "other" special rate, according to my escort friend.

 

However, she can probably claim for hotel accommodation as an allowable expense, I suspect.

 

C

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This thread has given me some food for thought next time I'm desperately trying not to cum  :o

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