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Thread: UK dancers about to take a tax 'beating' ...

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    Banned Melonie's Avatar
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    Default UK dancers about to take a tax 'beating' ...

    ... based on an appeal filed by Spearmint Rhino



    (snip)"High-earning lap dancers face losing a share of their income to the taxman after the High Court ruled that the dancers – and not the clubs where they perform – are liable for VAT.

    The decision came in a successful challenge by Spearmint Rhino - which describes itself as operating a chain of “gentleman’s clubs” - against an earlier VAT tribunal decision that found the club had to pay the tax.

    In a test case that could apply to dancers in other establishments - and have ramifications for other jobs - Mr Justice Mann agreed with Spearmint Rhino’s claim that since the dancers were self-employed, there was a “direct engagement” between them and the customer.

    He said that although the dancers must pay the club to use its premises and abide by a code of conduct, they were essentially “plying their self-employed trade at the club in their own right” and so liable to pay VAT on their takings.

    The court heard how establishments such as Spearmint Rhino, whose flagship club in Tottenham Court Road, London was described as a “typical example”, offer two discreet forms of entertainment: general podium dancing and private dancing.

    The judge said he was concerned with the second, more lucrative, arrangement where dancers interact with customers directly to offer individual dances for £10 or £20 a time.

    In addition, he noted that dancers offer a “sit down” service where, for around £250, “a woman can be engaged to sit and socialise with the customer for an hour” that raised the same issues. Both kinds of transaction are typically paid for in cash.

    Allowing Spearmint Rhino’s appeal, the judge ruled that the arrangement of private dances or “sit downs” amounted to a transaction between the dancer and her customer, in which the club played only an indirect role and could not be held liable for VAT as the original tribunal found.

    Despite the defeat, the ruling will only affect those dancers who earn in excess of £64,000 a year - the limit at which self-employed workers become eligible to pay VAT.

    A spokeswoman for Spearmint Rhino said it was “very difficult” to say how much a typical dancer earned each year but added that all dancers were required to declare their earnings to the taxman as a condition of working in their clubs.

    A spokesman for HM Revenue conceded that since the bulk of transactions are settled in cash, it would be difficult to detect whether dancers were declaring their earnings honestly. He added that HMRC had not yet decided whether to appeal against the decision.

    Harriet Morgan, a tax partner at lawyers Reed Smith Richards Butler, said: “The case hinges on the finding that the dancers were not acting as the agent of Spearmint Rhino in providing dances but as principal.

    “Other types of self-employed workers, such as hairdressers who 'rent' a chair in a salon but do not work for the salon directly, could now also become liable for VAT as a result of this decision.” "(snip)

  2. #2
    aussiepunkshocker
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    Default Re: UK dancers about to take a tax 'beating' ...

    That sounds like it works the same as in Australia then.

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    Default Re: UK dancers about to take a tax 'beating' ...

    I'm guessing our GST is the same as the VAT over there? If so, then APS is correct. We do pay GST if we earn over $50,000 before tax.


    enter: E3167322D9 for your 10% discount

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    Default Re: UK dancers about to take a tax 'beating' ...

    Most clubs have always made it clear that the girls are responsible for their own tax affairs but i was quite pleased at the earlier ruling that would have meant clubs were liable.

    Due to the amount of rules and fees paid i really do think it is the responsibility of the club as an 'employer'. I wish dancers would get militant and decide that if they are going to be classed as self employed then they are damned well going to change a few things that clubs demand/ expect... (and yes, i know why in practice that is just never going to happen, but it is a fine dream)

  5. #5
    aussiepunkshocker
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    Default Re: UK dancers about to take a tax 'beating' ...

    ^^^I dont mind paying club fees so much because I claim them back anyway. I do however think the house fees should be low. I not happy if I have to pay more than $30 per night to work.

    And yeah VAT / GST same thing.

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    Default Re: UK dancers about to take a tax 'beating' ...

    The tax case was caused by Spearmint having so many restrictions on the girls that worked there that the revenue tried to say they were effectively employed. The IR then tried to charge Spearmint for back VAT on the whole of the price of the dance rather than just the commission. This ruling just puts the system back to what it was. The VAT threshhold { where you have to register} is about £65,000 a year, if you earn { or declare} less than that it does not apply. I can't see it being very easy for the IR to collect tax from hundreds of dancers moving from club to club. If they do decide on a crackdown { and due to wasting vast sums Brown is desperate to find more tax from somewhere} they will have to use the clubs themselves to do it.

    Tyke

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    Veteran Member Bubble's Avatar
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    Default Re: UK dancers about to take a tax 'beating' ...

    Despite the defeat, the ruling will only affect those dancers who earn in excess of £64,000 a year - the limit at which self-employed workers become eligible to pay VAT.
    That's like $128,000! I'm pretty sure I don't have to worry!!!

    Quote Originally Posted by spartaca
    Due to the amount of rules and fees paid i really do think it is the responsibility of the club as an 'employer'. I wish dancers would get militant and decide that if they are going to be classed as self employed then they are damned well going to change a few things that clubs demand/ expect... (and yes, i know why in practice that is just never going to happen, but it is a fine dream)
    AMEN SISTA!

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    Default Re: UK dancers about to take a tax 'beating' ...

    Quote Originally Posted by threlayer View Post
    To be theoretical.... Just what Value to strippers add to what?

    They don't take in raw materials and shape them into something (add value). I mean they may deal with pretty raw people but they dont add value to them.
    It isnt even like the value added to finger nails when you go into a nailshop. If anything it's like the value added to a person when he goes for therapy.

    I'm glad we dont have VAT in USA; it would give me tremendous frustration figuring out what is logical and what is just pure exploitation.
    VAT in Europe is charged on everything from cars to hairdressing provided they get above the threshold. If the turnover is big enough you have to charge VAT, businesses can claim this back but the public can't.

    Tyke

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