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Author Topic: Self employed escort: Sole trader or Limited company?  (Read 8952 times)

Naked Chef

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Self employed escort: Sole trader or Limited company?
« on: 17 June 2015, 11:18:32 am »
I was advised by one of my clients to use Intouch Accounting; an online accounting firm. They charge a little over ?100 a month but handle everything for you, they even register you as a ltd company and manage your taxes so that you pay the absolute minimum. It seems to be a bit like a daily / weekly data entry for declaring all tax deductible spending, which really helps me, who tends to leave all things to the very last minute!!  The website looks pretty sound. I am just wondering if anyone has used them before?

amy

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Re: Self employed escort: Sole trader or Limited company?
« Reply #1 on: 17 June 2015, 11:40:09 am »
I've no idea about the specific place mentioned, but you really, REALLY don't want (or need) to be registered as a limited company - it means a lot of extra paperwork, it's neither appropriate nor necessary and given Companies House's previous attitude towards prostitution businesses I'm not even sure it's legal.

There are exceptions just like everything else, but they don't normally apply here unless you have some other business you want to put your income from sex work through and which nobody can link to your prossie ads :).

xw5

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Re: Self employed escort: Sole trader or Limited company?
« Reply #2 on: 17 June 2015, 11:41:17 am »
Yep, prostitution is not an acceptable business for a company registered in England and Wales (and doubtless Scotland and NI...) to engage in - when discovered, it will be removed from the register and HMRC will be wanting to talk to you about the tax you've evaded.

'A little over ?100 a month' is over ?1,200 a year. That's a big incentive to learn to keep a proper diary record of your income and expenditure yourself, I'd have thought.
'The Ian formerly known as SW5'. What they said: "Indispensable", "You are our best resource", and (hours later!) "I'm afraid that you're being made redundant..."

Winding down YourEscortSite.com

amy

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Re: Self employed escort: Sole trader or Limited company?
« Reply #3 on: 17 June 2015, 11:45:22 am »
'A little over ?100 a month' is over ?1,200 a year. That's a big incentive to learn to keep a proper diary record of your income and expenditure yourself, I'd have thought.

Lord, I missed that part :o.

NC, by way of a yardstick my (qualified, chartered and extremely personable) accountant charges well under half that and he's not considered cheap. A paper diary and pen is even cheaper and a spreadsheet in Excel/Open Office is even less than that :).

cheesypeas

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Re: Self employed escort: Sole trader or Limited company?
« Reply #4 on: 17 June 2015, 12:02:26 pm »
Clients who give advice...hmmm.
Hold your breath and count to 10 every time a client gives 'advice'.
Then pinch yourself till it hurts!

That sounds crazy-ass expensive and unnessary!  :o
Being a limited company obliges you to a shed-load of
legal obligations that may not best suit your work structure.

What advantages do you feel a limited company gives you?


« Last Edit: 17 June 2015, 12:29:19 pm by cheesypeas »
Random idle thoughs...Can I manage 100 sit ups a day for a year...?

Lady_Lust_XXX

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Re: Self employed escort: Sole trader or Limited company?
« Reply #5 on: 17 June 2015, 12:02:40 pm »
I agree that the prices quoted (1200 a year)  are far too expensive.

We are able to keep a diary, keep receipts (and keep them in chronological order) and if the accountant is doing their job right, what we can claim for as this is IMO the most important bit, then we would only need to pay a fraction of this cost and I mean a very small fraction.

I was lucky to do accounts and bookkeeping at college so it gave me a head start and confidence in what I was dealing with.



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It is about having a pretty mind, a pretty heart,
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Naked Chef

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Re: Self employed escort: Sole trader or Limited company?
« Reply #6 on: 17 June 2015, 01:36:50 pm »
From my understanding, being a ltd company means that you have a higher allowance for income before tax can be paid on it. To be honest, the whole thing completely confuses me. I have registered as a self employed massage therapist with HMRC but I'm not quite sure how I can claim hotel bills on expenses for that :-S I thought this would make my life easier!!!

xw5

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Re: Self employed escort: Sole trader or Limited company?
« Reply #7 on: 17 June 2015, 01:55:21 pm »
The idea behind 'being' a limited company is that your company pays you a pittance in salary, but also pays out a substantial dividend to the shareholders (i.e. you). The latter is income, and taxed accordingly, but doesn't attract NI contributions.

It only works if you're earning above about ?25k a year, it involves an extra level of faff - you can easily find out the full name of the directors of a company and you need an address that people can inspect your company documents at - and... it doesn't work for prostitution for the reasons above.
'The Ian formerly known as SW5'. What they said: "Indispensable", "You are our best resource", and (hours later!) "I'm afraid that you're being made redundant..."

Winding down YourEscortSite.com

xw5

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Re: Self employed escort: Sole trader or Limited company?
« Reply #8 on: 17 June 2015, 02:01:35 pm »
I have registered as a self employed massage therapist with HMRC but I'm not quite sure how I can claim hotel bills on expenses for that

Even massage therapists need somewhere to work! You can't claim the cost of buying an incall location, but rent for one counts. What's a hotel bill but rent for the room? From the HMRC bit of gov.uk:

Quote
Costs you can claim as allowable expenses

These include:

    office costs, eg stationery or phone bills
    travel costs, eg fuel, parking, train or bus fares
    clothing expenses, eg uniforms
    staff costs, eg salaries or subcontractor costs
    things you buy to sell on, eg stock or raw materials
    financial costs, eg insurance or bank charges
    costs of your business premises, eg heating, lighting, business rates
    advertising or marketing, eg website costs

It sounds like you need to talk to an accountant, and most will have a relatively cheap initial consultation when you can ask them questions like this.
'The Ian formerly known as SW5'. What they said: "Indispensable", "You are our best resource", and (hours later!) "I'm afraid that you're being made redundant..."

Winding down YourEscortSite.com

cheesypeas

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Re: Self employed escort: Sole trader or Limited company?
« Reply #9 on: 17 June 2015, 02:03:22 pm »
It is confusing at first.
Yes what XW5 said, your earnings, accounts, 'address', etc are public knowledge.
Anyone can look them up for free.
Companies House stores them.

I agree a reasonable consult with an accountant, look, learn, then
possibly head for self-assesment once you know the ropes.

HMRC are very helpful and you can speak to them as
long as you like the phone while on that learning process.
« Last Edit: 17 June 2015, 02:11:44 pm by cheesypeas »
Random idle thoughs...Can I manage 100 sit ups a day for a year...?

Naked Chef

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Re: Self employed escort: Sole trader or Limited company?
« Reply #10 on: 18 June 2015, 07:04:44 pm »
Thanks guys. I have my self assessment to complete for last tax year and am freaking out. I think I had better just hire myself an accountant! Are most of them fairly accepting of sex workers. I did order the tax relief diary last night so hopefully that will help!

Fabulassie

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Re: Self employed escort: Sole trader or Limited company?
« Reply #11 on: 18 June 2015, 07:32:27 pm »
I haven a limited company but I don't take a dividend for tax reasons that I can't go into here. I do it because it makes it easy to look good to estate agents. I already had it for another business and just kept using it. Since I don't take a dividend nothing dire would happen if they were to object and I don't think it's likely.

A very high profile brothel in the North West is a limited company. Perhaps someday they'll get into trouble about it.

amy

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Re: Self employed escort: Sole trader or Limited company?
« Reply #12 on: 18 June 2015, 07:34:07 pm »
Are most of them fairly accepting of sex workers and their money

Yep. Funny that :).

cheesypeas

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Re: Self employed escort: Sole trader or Limited company?
« Reply #13 on: 18 June 2015, 07:36:37 pm »
Oh well fair ....you find it works for that purpose Fabs.

Chefy, I don't think accountants are any more accepting than the rest of the population...
Check em out!
I never tell them exactly what I do. But I don't use them now.
« Last Edit: 18 June 2015, 07:43:03 pm by cheesypeas »
Random idle thoughs...Can I manage 100 sit ups a day for a year...?

amy

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Re: Self employed escort: Sole trader or Limited company?
« Reply #14 on: 18 June 2015, 07:43:48 pm »
Any accountant is offering a paid, professional service to people running businesses and part of that service is to behave professionally and appropriately.

A small prostitution business run by a sole trader shouldn't present any problems for anybody properly qualified any more than a window cleaners would, and the only real problems I've heard of from other sex workers have been from accountants who were specifically targetting us, and as such thought it was fine to make inappropriate remarks and so on.

Like anything else, get recommendations and ring round a few - you should get a free consultancy appointment with each to discuss your situation and then you get to pick :).