Every so often a
story emerges of an escort who has been landed with a colossal tax
assessment which grossly overestimates her earnings, leaving her
faced with the seemingly impossible choices of either paying a vast
sum of money in tax or attempting to prove that the taxman has got
his calculations wrong.A typical example goes
something like this. Taxman says to escort: you charge £100
per hour and I think you work a 40 hour week, so that's
£200,000 per year and £1.2M over the last 6 years. You
don't have any evidence of expenses so we want tax on the lot.
That's £375,000 in tax plus interest of £60,000 and 100%
penalties for fraud of another £375,000, plus VAT of
£180,000. Here's a bill for £990,000. You have 30 days to
pay.
Undoubtedly this
scenario can, and does, happen. But it's not difficult to avoid and
for an escort to find herself in this situation she would need to
have passed up several opportunities, over a period of years, to
get her tax affairs in order.
Most escorts are in
business primarily to make money. So the kind of head in the sand
mentality that can get you into this sort of mess is right up there
alongside offering bareback because you imagine you have natural
immunity to sexually transmitted infections. Life ain't fair, and
only a fool would take unprotected risks with their health or their
wealth, but you can significantly alter the odds in your favour
with a few simple precautions.
And if you do nothing
else you could start by investing £8.95 in a
book-keeping
system that will
at least mean that when the taxman's brown envelope lands on your
mat you have some basis for demonstrating what you've actually
earned.In this section we'll
look at what can go wrong, how the tax authorities deal with tax
investigations, and what you can do to protect
yourself.
1. Do-it-Yourself
