Escorts and tax

[hullad]

I have recently been contacted by the inland revenue about payments I made to local escort.  I normally pay by cash but I startd to see this one regular and I was scrambling on day to get cash and I told her, she suggested a bank transfer. Not a problem for either of us so I did it. This was last year and I got a little tired of her, as we do and so stopped seeing her just before Christmas.

Now just last week I had a letter from the tax mob wanting to speak to me in relation to her. I had a phone convo yesterday and I have to give a formal statement. I could not in all honesty deny not knowing her or the payments, perhaps witha bit of time I could come up with a ' fairy story '.

I have not contacted her and won't, I walk away I am done end of. If these ladies choose not to pay tax fair enough it's nothing to do with me. They have told me no names will be used if it progresses to court, I don't want to get involved and I may just refuse to make a statement. The investigator told me they had around eight others and the tax avoided was substantial. I don't want them sniffing around me either as I do run a little bit on ebay which is all second hand I pick up and sell on, it pays for a holiday.

 I do pay tax fully on my pensions ( too much ) and always have done. Anyone had dealings like this as I don't really want to be involved, exposure is less of an issue for me these day's, but I don't want my name plastered all over local press or Internet.

[Spunky34]

I would co-operate fully with HMRC - just get them off your back as soon as possible.  Don’t go trying to invent a story.  HMRC will doubtless want to know about anything like cash payments you might have made to her before as well as the bank payment.  Just close it down as quickly as possible.

It’s not your problem if she hasn’t paid the tax, but you don’t want to give anyone any opportunity to create a problem for you.

[jamiekinkxxx]

I would co-operate too.

Anyone who is not paying tax by evasion, which this sounds like deserves to have the book thrown at them. They are cheating us all out of govt. revenue that could be used to pay for much needed / better funded public services.

Everyone should try and legitimately try and reduce their tax bill, but only by lawful means. I have no sympathy for tax evasion.

[CanOfRedBull]

Wow - Certainly a lesson for anyone who is thinking about paying a working girl via online bank transfer,  DON’T. 

[daviemac]

I would co-operate too.

Anyone who is not paying tax by evasion, which this sounds like deserves to have the book thrown at them. They are cheating us all out of govt. revenue that could be used to pay for much needed / better funded public services.

Everyone should try and legitimately try and reduce their tax bill, but only by lawful means. I have no sympathy for tax evasion.

I'm presuming you are including the OP with his undeclared Ebay sideline in this?   

[jamiekinkxxx]

I'm presuming you are including the OP with his undeclared Ebay sideline in this?   

Indeed, but my understanding is that you have to make £1k sales before any tax is due:

"The tax that you owe on eBay profits depends on how much profit you make. If you make up to £1,000 a year from your eBay sales – assuming that they don’t account for your full-time income – this is completely tax-free with the Trading Allowance. The Trading Allowance enables you to earn self-employment profits tax-free, not to be confused with the Personal Allowance which is the tax-free portion of your full-time earnings. The Personal Allowance currently sits at £12,570 for the 2023/24 tax year." - Tax Scouts.

If he does then yes I think he should declare it and eBay is now sharing information with HMRC anyhow, so if you do have a successful side-hustle then HMRC maybe interested.

[StingRay]

I agree with all that's been suggested, specifically do not fuck with HMRC as there will only be one winner, and that's not you!

Moving on, it does go to show though that it's important to plan ahead and be prepared to cancel the punt if for some reason (and shit does happen) you don't have the readies, so you could say that HMRC's attention was self-inflicted - unfortunate and unexpected though of course

[PilotMan]

I don't want them sniffing around me either as I do run a little bit on ebay which is all second hand I pick up and sell on, it pays for a holiday.

Indeed, but my understanding is that you have to make £1k sales before any tax is due:

"The tax that you owe on eBay profits depends on how much profit you make. If you make up to £1,000 a year from your eBay sales – assuming that they don’t account for your full-time income – this is completely tax-free with the Trading Allowance. The Trading Allowance enables you to earn self-employment profits tax-free, not to be confused with the Personal Allowance which is the tax-free portion of your full-time earnings. The Personal Allowance currently sits at £12,570 for the 2023/24 tax year." - Tax Scouts.

If he does then yes I think he should declare it and eBay is now sharing information with HMRC anyhow, so if you do have a successful side-hustle then HMRC maybe interested.

The net profit on £1k Turnover (£1k TURNOVER, that's the limit), even if it was 99%, doesn't leave much money for a holiday.

Do they still do coach holidays to Skegness?

Once you surpass the £1k limit you need to register with HMRC as a business, if you're not already registered.

HMRC have had their eye on eBay, Etsy et al for a long time. It's only recently that they've had the unfettered access to peoples eBay trading figures. It's really easy now for HMRC to go through the list of people selling more than £1k that haven't provided eBay with their Business and tax details. They are starting with the higher turnover traders and working their way down the list.

It won't be long now @hullad, be prepared for a knock on the door.

[DastardlyDick]

As already said, just tell HMRC what they want to know - you've done nothing wrong.
They're obviously monitoring this SPs bank account, otherwise how would they know about this payment?

[8MillionDollarMan]

The net profit on £1k Turnover (£1k TURNOVER, that's the limit), even if it was 99%, doesn't leave much money for a holiday.

Do they still do coach holidays to Skegness?

Once you surpass the £1k limit you need to register with HMRC as a business, if you're not already registered.

HMRC have had their eye on eBay, Etsy et al for a long time. It's only recently that they've had the unfettered access to peoples eBay trading figures. It's really easy now for HMRC to go through the list of people selling more than £1k that haven't provided eBay with their Business and tax details. They are starting with the higher turnover traders and working their way down the list.

It won't be long now @hullad, be prepared for a knock on the door.

I'm no ebayer but surely the 1k relates to business sellers only.

[daviemac]

I'm no ebayer but surely the 1k relates to business sellers only.

If you're trading on Ebay you are a business.

[finn5555]

Bottom line don’t fuck with the inland revenue 

If she chooses not to pay tax that’s her problem

[8MillionDollarMan]

If you're trading on Ebay you are a business.

No doubt but buying a selling a few things like the OP is unlikely to attract the ire of HMRC,I mean the lazy fucks don't even go into the office most days.
I will however declare HMRC lost a case against me so I have an irrational dislike of them.

[daviemac]

No doubt but buying a selling a few things like the OP is unlikely to attract the ire of HMRC,I mean the lazy fucks don't even go into the office most days.
I will however declare HMRC lost a case against me so I have an irrational dislike of them.

They're in contact with him and have his bank details now, they might just decide to have a look while they're on.

[8MillionDollarMan]

They're in contact with him and have his bank details now, they might just decide to have a look while they're on.

True low hanging fruit.

[daviemac]

True low hanging fruit.

They might want to check if he's paid any other tax dodgers and come across the income from Ebay.   

[8MillionDollarMan]

They might want to check if he's paid any other tax dodgers and come across the income from Ebay.   

Indeed and the moral of the story is pay in cash.

[spiralnotebook]

An object lesson for those who advocate doing away with cash.

[southcoastpunter]

An object lesson for those who advocate doing away with cash.

depends on your viewpoint.

as a punter of course most will always want to pay in cash so as not to leave a trail. But from a taxpayers point of view, its probably better if all payments are made electronically so that they cannot be hidden as easily as cash payments!

[daviemac]

depends on your viewpoint.

as a punter of course most will always want to pay in cash so as not to leave a trail. But from a taxpayers point of view, its probably better if all payments are made electronically so that they cannot be hidden as easily as cash payments!

Not if you've got a tax fiddle of your own going on.

[hullad]

Lol

I repair, revamp old Triang and Hornby dublo model railway items as a hobby more then anything. I make enough to cover a weekend or two away at model shows etc. I have no need for the money, it's a hobby and my accountant is fully involved and I ofset my expenses against it.  I not concerned about the HMRC looking at my personal or any other bank account, I run a clean ship lol

My concern was mainly exposure, I am now a widower so it's not paramount these days. This is the only one I used bank transfer over a few months she knew my name anyway it just went pear-shaped at Christmas and I funked her off, then this shit.

I will now stick to an odd Asian massage and my regular of 9 years who has never ever been a problem, well apart from her none existing time keeping.

[Punting2022]

80 percent wont pay tax, HRMC are coming down hard on people.
Bank accounts being checked for benefits, also banks are limiting cash deposits etc.

Regarding your ebay thing, a rule was brought in where ebay can share sales profits to hrmc.

[alabama1]

80 percent wont pay tax, HRMC are coming down hard on people.
Bank accounts being checked for benefits, also banks are limiting cash deposits etc.

Regarding your ebay thing, a rule was brought in where ebay can share sales profits to hrmc.

Where the fuck do you get that from 

[robbie54321]

This is my take on HMRC
They have not the time or man power to check the eBay, Etsy, escorts, normal business tax affairs.
Not a chance. Covid is still a get out of jail free card. They do not kick your door down if you don’t pay vat, company tax, personal tax. I’m not condoning HMRC stance as in my opinion it’s messed up business and business to business payments and It’s all down to covid.
As a side note, I know escorts who do pay tax and some do pay a lot of tax

[alabama1]

This is my take on HMRC
They have not the time or man power to check the eBay, Etsy, escorts, normal business tax affairs.
Not a chance. Covid is still a get out of jail free card. They do not kick your door down if you don’t pay vat, company tax, personal tax. I’m not condoning HMRC stance as in my opinion it’s messed up business and business to business payments and It’s all down to covid.
As a side note, I know escorts who do pay tax and some do pay a lot of tax

And how would you know that , unless you were their pimp/accountant 

[daviemac]

This is my take on HMRC
They have not the time or man power to check the eBay, Etsy, escorts, normal business tax affairs.
Not a chance. Covid is still a get out of jail free card. They do not kick your door down if you don’t pay vat, company tax, personal tax. I’m not condoning HMRC stance as in my opinion it’s messed up business and business to business payments and It’s all down to covid.
As a side note, I know escorts who do pay tax and some do pay a lot of tax

Did you read the OP??? as they're asking him for a statement about the money he paid an escort it looks like they've found the time to check her out.

[DastardlyDick]

Lol

I repair, revamp old Triang and Hornby dublo model railway items as a hobby more then anything. I make enough to cover a weekend or two away at model shows etc. I have no need for the money, it's a hobby and my accountant is fully involved and I ofset my expenses against it.

Wow! I have a couple of old Triang dublo locos Britannia and Princess Elizabeth - the haven't worked for years! The Princess Elizabeth might be worth a few bob - it has a metal casing rather than plastic

[Hornydevil666]

Fuck selling a £22k car on eBay then 5 mths later HMRC comes along for their cut.

[Doc Holliday]

Fuck selling a £22k car on eBay then 5 mths later HMRC comes along for their cut.

I understand private cars sales are normally not subject to tax (capital gains tax) as they are consider 'wasted assets' ie you purchased it for more than you sold it This same principle applies to most private sales of second hand goods but there can be exceptions. If you are not a trader though then HMRC is highly unlikely to look at any detail.

[Doc Holliday]

I repair, revamp old Triang and Hornby dublo model railway items as a hobby more then anything. I make enough to cover a weekend or two away at model shows etc. I have no need for the money, it's a hobby and my accountant is fully involved and I ofset my expenses against it.  I not concerned about the HMRC looking at my personal or any other bank account, I run a clean ship lol

My concern was mainly exposure, I am now a widower so it's not paramount these days.

If your ebay stuff etc is all above board why are you concerned about this?

I don't want them sniffing around me either as I do run a little bit on ebay which is all second hand I pick up and sell on, it pays for a holiday.

Also if you are worried about personal exposure I would suggest there is a lot of personal information being given out here?

[Doc Holliday]

This is my take on HMRC

My take on HMRC is that unlike the Police and CPS, if they accuse you then the emphasis can be more on you proving your innocence rather than them proving your guilt. The last thing you want is an HMRC investigation whatever the final outcome.

[Blackpool Rock]

80 percent wont pay tax, HRMC are coming down hard on people.
Bank accounts being checked for benefits, also banks are limiting cash deposits etc.

Regarding your ebay thing, a rule was brought in where ebay can share sales profits to hrmc.

Well according to many of the girls who post on here they all pay tax 

HMRC are a bunch of incompetent arseholes and have been since well before Covid, they can't seem to actually get any more than a few quid out of large multinationals but they do seem to be able to go after the smaller guys.
I've posted this before about them but I had issues with them for years where they decided my legitimate business expenses were a benefit in kind so changed my tax code despite the expenses clearly being filed as business expenses.
Every year I had to write to them and they then recalculated but couldn't seem to get the figure to land at zero tax, one year they wrote to me about 4 times with a revised calculation, each one was based on the same information but each calculation was different 
It normally ended up with me giving up when they said I owed them somewhere between £5 and £10 as my time was worth more to me than i'd get back, they kept referring to under payments from the previous year even though there wasn't, the figures were only ever out because they'd fucked it up to begin with   

It then transpired that a few other people at work had also had the same problem for years and not even noticed it as they hadn't checked their tax code was correct when they received it 

[southcoastpunter]

Well according to many of the girls who post on here they all pay tax 

HMRC are a bunch of incompetent arseholes and have been since well before Covid, they can't seem to actually get any more than a few quid out of large multinationals but they do seem to be able to go after the smaller guys.

that is because the tax position of multi-nationals was both complex and required international agreements to change things. And you have to remember history - the UK government encouraged a number of overseas companies to come her / expand here when un-employment was a major problem here. they did so and created many 1000's of jobs and then we started moaning about the tax that they paid or not paid here in the UK!!

But like theft - the amount is not the issue. theft and tax evasion of ANY amount and BY ANYONE (big or small) is wrong and should be pursued by the authorities.

It would be interesting to know your personal position on a tradesman offering a job at say £500 or £450 for cash. would you say - no, i'll pay the £500? not legally wrong but perhaps morally wrong as you know he ain't going to declare all of it!

[marc_hotsteppa]

Just remember when you're selling second hand things on eBay (i.e. stuff you have owned) that for the most part if you bought those items new and paid more than you sell them for then it won't be an issue with HRMC as if you're audited you can show a receipt for how much you originally paid for the item(s)

 

[andyw1969]

I would have thought just like a lot of self employed people where cash plays a part, how much they declare could be different.

If it is and they get caught then that’s up to them ,if they get away with it then fair play .

Personally I always pay my tax , as others has said if you don’t and get caught there is only one winner .

[Andywb]

We don't know why hmrc began looking at this SP in the first place. You might think they had better things to do. But they are still investigating cases of furlough payment fraud from the pandemic and doubtless other things more significant than cash payments to escorts. Issues around this SPs cash receipts may have come up when they were initially looking at something more important.

[Blackpool Rock]

that is because the tax position of multi-nationals was both complex and required international agreements to change things. And you have to remember history - the UK government encouraged a number of overseas companies to come her / expand here when un-employment was a major problem here. they did so and created many 1000's of jobs and then we started moaning about the tax that they paid or not paid here in the UK!!

But like theft - the amount is not the issue. theft and tax evasion of ANY amount and BY ANYONE (big or small) is wrong and should be pursued by the authorities.

It would be interesting to know your personal position on a tradesman offering a job at say £500 or £450 for cash. would you say - no, i'll pay the £500? not legally wrong but perhaps morally wrong as you know he ain't going to declare all of it!

This has been discussed on various other threads and fairly recently too, how can it be justified when multi £billion companies like Shell; Amazon; Starbucks and Vodafone pay less UK tax than someone earning £20K who pays it through PAYE 

I get that a company like Shell earns a lot of it's money from overseas so it's not necessarily due to pay UK tax on that but the portion they should pay UK tax on gets negated by moving the money around and claiming it was used for exploration / decommissioning etc etc etc, they can go years on end paying no tax whatsoever despite the official claims that the oil and gas companies pay tax at a special higher rate they actually pay none 

If a company is tempted to come to the UK and set up it's operations / factory then i'm OK with a special tax arrangement or contribution to building a factory to secure the deal if they are then providing 1000's of jobs but it would have been agreed upfront, these agreements also need to be time limited

Regarding people paying tradesmen cash in hand i've not done this myself however you do hear the references from people about the likes of Shell etc basically fiddling the system so i'm sure people use that as justification to do it themselves

[PilotMan]

Indeed and the moral of the story is pay in cash your tax.

I fixed your morals for you 

[simon07]

Wow - Certainly a lesson for anyone who is thinking about paying a working girl via online bank transfer,  DON’T.

+1

[Trpy]

I am a bit confused about the original post.

If the payment was made after 6th April 2023, that would come into the year ending 5th April 2024, and the tax return would be due January 2025.

The revenue would not be investigating her for tax which is not due yet. 

If the payment was made in the early part of 2023, the tax return would only have fallen due about 4 weeks ago, and at this stage she might have to pay a penalty - but it wouldn't have given rise to a full investigation so early on.

Also curious as to how they got your address.   Do you think the bank just gave it to them.

And why would they want to tell you that 8 other girls are under investigation.   They do not disclose any information.  They ask questions, and you are expected to answer them, there is never any general or immaterial information imparted in these exchanges.

[southcoastpunter]

I fixed your morals for you 

i think you need to fix Andyw's morals as well:

If it is and they get caught then that’s up to them ,if they get away with it then fair play .

its not fair play at all!! Not as an individual, as a tradesman, as a small business or as a multi-national company! The collective effect is that we honest tax payers end up paying more to make up for the ones that don't pay their (legally due) tax!

my last comment on this as otherwise we will continue being "off topic" and have (another) debate on the rights and wrongs of our tax system!

[Blackpool Rock]

I am a bit confused about the original post.

If the payment was made after 6th April 2023, that would come into the year ending 5th April 2024, and the tax return would be due January 2025.

The revenue would not be investigating her for tax which is not due yet. 

If the payment was made in the early part of 2023, the tax return would only have fallen due about 4 weeks ago, and at this stage she might have to pay a penalty - but it wouldn't have given rise to a full investigation so early on.

Also curious as to how they got your address.   Do you think the bank just gave it to them.

And why would they want to tell you that 8 other girls are under investigation.   They do not disclose any information.  They ask questions, and you are expected to answer them, there is never any general or immaterial information imparted in these exchanges.

You don't know how long they have been looking at the girls finances / accounts and i'm sure that HMRC will have various powers to force banks etc to disclose information even if it needs to go through certain processes where they suspect fraud / tax evasion / money laundering etc etc
Aren't the banks also supposed to flag up any strange accounting patterns like a girl regularly depositing £1000's into an account 

I got asked where i'd got £5K from once when paying it into the bank, it was put nice and friendly as the cashier asked if i'd just sold a car or something but I knew they were probing and they were surprised when I told them the truth that i'd won it on football at the bookies

[jamiekinkxxx]

I would have thought just like a lot of self employed people where cash plays a part, how much they declare could be different.

If it is and they get caught then that’s up to them ,if they get away with it then fair play .

Personally I always pay my tax , as others has said if you don’t and get caught there is only one winner .

100% agree wiyj southcoastpunter retort on this! 

Would you say the same thing about someone burgling your home or mugging you in the street? Same principle. In no way is tax evasion right

[Martinx]

Generally, I'm in favour of people paying their taxes, whether they are an escort or a self-employed plumber. But are you really obliged to talk to HMRC about someone else's tax affairs?

[finn5555]

Generally, I'm in favour of people paying their taxes, whether they are an escort or a self-employed plumber. But are you really obliged to talk to HMRC about someone else's tax affairs?

What the OP has posted is rather unusual IMO but it may depend how much money we are talking about 

[PilotMan]

Just remember when you're selling second hand things on eBay (i.e. stuff you have owned) that for the most part if you bought those items new and paid more than you sell them for then it won't be an issue with HRMC as if you're audited you can show a receipt for how much you originally paid for the item(s)

If you're making a loss on items - you wouldn't be much of a business person  . Even so, if you were doing this (buying and selling) on a regular basis, you would still need to register as a business. You would just file your end of year accounts and declare a loss.



There are some factors HMRC will take in to account and they will often make a decision based on their opinion, if you can't comprehensively counter it. So if you have not declared trading activity, you're not only going to have to pay the amount of tax HMRC have "guestimated", your going to pay a penalty too. As Doc said, you're guilty until you prove your innocence.

Some considerations are; if you are buying things specifically to sell them and not use them, improving them to increase their value, have a consistent pattern of buying and selling items.

If you buy something second hand, a car for example, and can prove that you have used it legitimately, then sell it at a later date (not the following week), that probably wouldn't be considered trading.

On the other hand if you were doing that with say a classic car, keeping it six months and trading it on for a higher price and repeating that a few times, then HMRC may decide that you are running a business.

Anyone who is a trading entity and is turning over more than £1k, is required to register with HMRC within 3 months of starting.

[Trpy]

You don't know how long they have been looking at the girls finances / accounts and i'm sure that HMRC will have various powers to force banks etc to disclose information even if it needs to go through certain processes where they suspect fraud / tax evasion / money laundering etc etc
Aren't the banks also supposed to flag up any strange accounting patterns like a girl regularly depositing £1000's into an account 

I got asked where i'd got £5K from once when paying it into the bank, it was put nice and friendly as the cashier asked if i'd just sold a car or something but I knew they were probing and they were surprised when I told them the truth that i'd won it on football at the bookies

The payment was made last year.   They will not investigate tax which isn't due yet. So far there has been no wrongdoing in respect of either tax years 2022/23 or 2023/24  I agree that they may be investigating previous years, but that would be before OP's payment  so would not be relevant to their inquiries.

HMRC do have fairly wide ranging powers, but these are more to do with income & interest received by the person under investigation not by a 3rd party

[Trpy]

I understand private cars sales are normally not subject to tax (capital gains tax) as they are consider 'wasted assets' ie you purchased it for more than you sold it This same principle applies to most private sales of second hand goods but there can be exceptions. If you are not a trader though then HMRC is highly unlikely to look at any detail.

Absolutely right.   Unless you use your car in connection with your business, or you buy and sell so many that they class you as a trader, they are not interested in your car.   Which is a bit of a loop hole if you have a DB5 in your garage.

[8MillionDollarMan]

I fixed your morals for you 

I don't think you understood my post 

[hullad]

I am a bit confused about the original post.

If the payment was made after 6th April 2023, that would come into the year ending 5th April 2024, and the tax return would be due January 2025.

The revenue would not be investigating her for tax which is not due yet. 

If the payment was made in the early part of 2023, the tax return would only have fallen due about 4 weeks ago, and at this stage she might have to pay a penalty - but it wouldn't have given rise to a full investigation so early on.

Also curious as to how they got your address.   Do you think the bank just gave it to them.

And why would they want to tell you that 8 other girls are under investigation.   They do not disclose any information.  They ask questions, and you are expected to answer them, there is never any general or immaterial information imparted in these exchanges.

I have no idea why they are investigating, but they are and getting anyone's address is not difficult and no doubt the bank provided info when asked to. There data banks have everyone's details and my name is quite unique in fact I know of one other person with the same name. I do know the lady works in the care system and some of the practices within that sector leave a lot to desired.


 Its not  8 SPs they are talking to but 8 payees into accounts sorry if they look ambiguous.

I just don't like government departments hanging around me, I am wary now of drawing money out to pay an SP wondering who is watching and why.