As a self-employed worker, you’ll most likely have a number of running costs to maintain your work/business.
The good news is that you may be able to deduct some of these costs.
You earn £20,000 in a tax year, but your allowable expenses (items that you can claim expenses for) add up to £5,000. You will only need to pay tax on £15,000. This is known as your taxable profit.
It’s important to be aware that expenses can only be claimed for those items you can prove are exclusively for your work.
Not only are some people surprised by the number of items that sex workers can claim expenses on, many sex workers themselves are unaware of their potential rights for claiming expenses.
How to calculate your expenses
When you complete your tax return (via the Self Assessment form), you will need to disclose your business expenses.
Here you may have the option to give a single figure for your allowable expenses or to give a detailed breakdown.
It’s not enough to just keep a receipt of your expenditure; if you are planning to expense items you will need to be able to prove how it relates to your profession.
Although you won’t be required to include these receipts with your tax return, you may need to present them if you’re subject to a tax investigation.
Keeping a log of what the item is, the cost, and how it has been used to help your work, is vital.
The official government website (Gov.uk) frequently provides useful webinars to explain what expenses are, and to help you provide accurate figures onto your tax return.
Items you can expense
|Clothing||Clothing that helps you earn your income. This therefore does not apply to everyday clothing like shirts, blouses, skirts etc. It does, however, include lingerie and costumes (PVC, nurses uniform, wigs, etc) for clients who are susceptible to BDSM and other kinks, as well as specific high heels that complete your work outfit. It is also worth noting that any items you buy and sell to your clients (worn underwear) can be expensed. You will need to ensure that you include the money you receive from your client as part of your income.|
|Sex Toys||Once again, this applies to sex toys and equipment that are used as part of your job. Depending on the services you provide, you may need to buy paddles, vibrators, strap-ons, dildos, wipes, canes, latex materials (like gloves) etc. Ensure that these toys are separate from any that you would use personally.|
|Supplies||You can expense condom supplies (as you can’t 100% rely on the client to provide them), baby oil, lube, tissues, wet wipes, mouth wash, fresh towelling, and refreshments.|
|Advertising Costs||Money spent on promoting your business and services, along with website charges that can incur for specific advertising space. Agency fees can also be included in this.|
|Accountant Fees||If you are a sex worker that uses an accountant, then you are entitled to claim this expense.|
|Travel Expenses||If you’re an outcall worker, you know that travel costs can be a pricey affair. When travelling to clients, you can claim motor vehicle expenses, including that of fuel, parking, and even train/bus fares. For those sex workers with the more high-end clientele, flight tickets are also in the mix. Be aware that you can’t expense flight tickets that the client paid for.|
|Phone Expenses||Including landlines and mobile pay as you go top-ups.|
|Rent/Rates||If renting business premises for your work, you can claim rent and business rates, alongside several utility bills on your expenses. This also applies to sex workers who are using part of their home for business use.|
|Photography||If you hire a professional photographer for advertising.|
|Subsistence||If you’re staying somewhere overnight for work, then you can claim for the cost of the hotel and things like lunch.|
|Work from home||Working from home could afford you to expense a share of your council tax, water rates and utility bills.|
|Internet Charges||Have your own site? Advertising your services on a platform and need to regularly communicate with clients? If yes, this can also be included into your expense claims. Maintaining your website (website maintenance) can also be included.|
|Bank Charges||Do you have an account used solely for business purposes? Any charges that concur can be expensed.|
|Personal Transport||If you own your own vehicle, and use it for work purposes (travelling to see a client etc) you can claim business mileage.|
|Beauty Supplies||Expensing makeup can be a little more tricky as you will have to prove that it is exclusively being used just for your job. Your best bet is to create a separate makeup bag for your work to make it more claimable.|
Items that cannot be claimed
It’s important to realise that not all items can be expensed. Items in which sex workers are unable to expense include:
- Vanity claims such as manicures, hairdressing or cosmetic surgery
- Any type of insurance
- Childcare and babysitter costs
- Gyms fees. Although you may use the facilities of a gym to keep you fit for your job, HMRC do not see it as an exclusive activity for work.
- NI contributions
- Payment of wages to yourself
Knowing what items you can claim expenses on will help to ensure you arrive at your business profit.
If the above seems daunting, don’t worry – there are a number of support systems and schemes to help you get started.
Remember, online tax returns should be submitted by 31st January every year (31st October for paper filings).
And don’t forget, it is vital that you keep all of your receipts and invoices in order to prove that any claims you have made have been legitimate.