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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3823
Experience:  FCCA FCMA CGMA ACIS
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I am a live webcam performer (camgirl, camwhore, etc.) This

Customer Question

I am a live webcam performer (camgirl, camwhore, etc.)This year I will be earning over the VAT threshold. However the site I mainly work on has this statement in their performer agreement:"We will not pay or make any payments on behalf of or for the benefit of Performer/Studio related to Social Security, Medicare, FICA, VAT taxes, federal or country taxes, state taxes, local taxes, workers compensation, unemployment premiums or insurance, or any other payments."I do not invoice them, I am simply paid my earnings, that are calculated by them, weekly.They do charge VAT to their European/UK customers but it seems there is no way to charge them VAT and they have even included that in the site terms.Obviously this puts me in an interesting position in that by registering for VAT, and have very little to write off against it, I will be at 12.5% disadvantage (if I went for the FRS) because the VAT will be coming out of my income and I will not be able to pass the cost on. A hard pill to swallow.Would I be better simply earning under the threshold and avoiding registering or is there anyway around this?Also is this kind of wording in a contract with a contracter common or is this not usually the case?Thanks!
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The VAT Turnover level for registration is 83K in any one year as I am sure you are aware.

If you have to register because you approach or exceed the turnover limit then you will have to slice out the VAT you will owe to HMRC once registered from your takings. Your income would effectively be reduced. The only solution is to operate below the turnover limit.

In what country does your principal agency operate, just as a matter of interest?

I am so sorry to be such a wet blanket at this stage.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your support.

Customer: replied 1 year ago.
Hi Keith,Sorry for my delayed response!I feared that may be the case as regards ***** ***** below the threshold, it is a hard decision to make I can either bite the bullet and pay the extra 20,000 odd in VAT/Tax and make 10/15k more take home a year or stay under the threshold and not pay the extra VAT/Tax.As for which country they operate in I am currently digging into this matter. As I am sure you can imagine this industry is not the most transparent! It seems they are a US based company on the face of it but I am trying to dig a bit deeper and find a bit more out about them.Thanks for the help even if it wasn't what I wanted to hear!
Expert:  bigduckontax replied 1 year ago.

Yes, the entry of VAT into the equation does rather make a difference doesn't it especially when you have minimal inputs to offset the tax.

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