How Do Strippers Calculate VAT, Anyway?
It looks like reporting and paying taxes in the UK just got easier for strip clubs, and a lot harder for individual strippers.
He backed the chain’s argument that the self-employed dancers provide the entertainment on offer, rather than the club.
“The women are not employed by the club. They are all self-employed,” Mann said. “They pay a sum to the club which allows them to ply their trade for a session of eight hours.”
“Some of them will be those dancing on the podium. These proceedings do not, at least directly, concern that activity.
“The activities which concern me are those provided as a result of more direct engagement between the women and the customer.
“For a sum of money, the women can be engaged to perform private dances for the customer. A fee of 10 pounds is charged for a semi-nude dance; 20 pounds is charged for a nude dance. Each dance lasts for a ‘track’, about three minutes.
While this is mostly a post with the intent of talking about strippers, it does bring up some interesting (and flippant) questions. In practice, it will require strippers to register with the British government as sole-proprietor businesses, and thus to pay business taxes. But the determination of taxes owed becomes problematic.
How does a stripper calculate their VAT? My interpretation of a VAT is that you must charge the VAT on your services, but then you can be refunded the VAT on business inputs necessary in the production of your “services”.
So do you get refunded the VAT that you paid when you bought your stripping clothes? Do you have to pro-rate this against the number of semi-nude and nude dances you perform, since those clothes aren’t used in the nude dances? Do you get to refund the VAT from purchasing exercise equipment necessary to maintain your figure, as it is a crucial factor in your business? And how do you calculate “what yo’ momma gave you”?
VAT taxes on services are by definition difficult to understand. What are you adding value to? For a stripper, your dancing ability— and your ability to make customers think you actually care about them, since strippers are in the business of selling the illusion of intimacy— are a value added to your general sex appeal. So how do you value your sex appeal in the determination of how much value your talent adds?
These are crucial questions that need to be answered. To answer those questions, I think it’s time for some extensive field research into the subject!