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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4074
Experience:  FCCA FCMA CGMA ACIS
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I offer a daily pay on adult webcam models. Basically I

Customer Question

Hello, I offer a daily pay on adult webcam models. Basically I charge them 6% for daily pay and all the funds they make from the website go into my bank. EG £1000 goes into my bank, I pay the girl £940. As you can imagine that will quickly reach the 75k VAT limit and then do I have to pay 20% on 75k? And then what tax would I pay? As then I doubt I will make any profit from it? Is there any way around it? I would like to know what different options i have, Thank you
Submitted: 11 months ago.
Category: Tax
Expert:  bigduckontax replied 11 months ago.

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

You will take a long time to reach the VAT turnover level as it will be based on the 6% you make only not on the full amount. Does that assist your thoughts?

I do hope that you have found my reply of assiatnce.

Customer: replied 11 months ago.
I was under the impression you have to pay vat when you reach 75k of turnover, not profit??
Customer: replied 11 months ago.
83k*
Expert:  bigduckontax replied 11 months ago.

The threshold is now 83K and your business books will show the 6% turnover, nothing more. The other sums will be credited direct to debtors and creditors ledgers.

Customer: replied 11 months ago.
even though there will be around 1 million going through my bank that won't matter as far as vat is concerned. Only when the 6% reaches 83k I need to worry.?
Expert:  bigduckontax replied 11 months ago.

Correct.

Customer: replied 11 months ago.
Are you completely sure? I thought because money goes into my bank that is classed as turnover? So on my tax return I wouldn't put down the 94% I pay to the girls? I would just write the 6% I keep? Sorry I just want to be completely sure
Expert:  bigduckontax replied 11 months ago.

Let us say you paid a girl 940 quid. The book keeping entry would be Dr Creditors, Cr Bank. You receive 1000 so you post Dr Bank Cr Creditors 940 Cr Fees received 60; simple.