Tax time sucks. To some of us, it’s unintelligible garble on paper and the only thing to alleviate the lengthy annoyance is – sometimes – a tasty return at the end.
An accountant can make things simple, if you can afford it. Together you’ll tie those two streams of income together, jump through a few loopholes, declare a few pens, a bit of paper, maybe a phone, a car, a laptop (if you’re lucky) to get you to that ultimate goal of enlarging your return.
But what about the jobs that aren’t so 9-5 and are a little less straight-forward? Take sex work: how would you know what to claim, when to claim and when to announce income? Can you claim your new boob job? Those g-strings? That fresh wig? Those whips?
There’s also more serious questions, too, like avoiding the discriminatory paper pushers that make claiming hard.
VICE: So when did you get into the business of being an accountant for sex workers?
James: Well, I worked for a major charity for about 10 or 12 years running one of their departments. Unfortunately, I crushed a couple of vertebrae in my back and I had spinal damage. I had quite a few sex worker friends, because I used to go to Hellfire Club and other fun clubs.
Basically, one of my escort friends said, “Look, if you've got to change jobs, become a tax agent. You're honest. You're a gentleman. You're not a sleaze. And I think you'd be good at it. I'll help you start a business”. And that's kind of where it started.
So I was at Tafe, to re-train, and I was basically older than most of the students and the same age as the lecturers. They asked, “Why are you here?” And I said, “Well, there's death, tax and sex. I've died in a motorcycle accident. I like sex, but I probably wouldn't make any money out of it. So I thought I'd do tax because I want to take money off the ATO and give it to people I like.”
How many customers are you working with at the moment?
I wish I was actually on my computer, but I'd say 100-something.
How do sex workers usually find you?
Word of mouth. Sex work organisations don’t actually reference people necessarily but I think some of them do, because some of them are my clients. And there's a couple of websites.
But my existing clients go, “Oh, I've got a great account. How about you see him?” And there’s a brothel madam who’s incredibly good to her staff and she’ll be like, “Right, you need an ABN, you need a good tax accountant to help you, and fight for you if needed. And James will do a great job.” So a lot of referrals.
It's a very mixed bag when it comes to sex workers. My clientele are every sexuality, pretty much every nationality. And every variation of sex work: I've got dominatrixes, professional subs, escorts, strippers, workers on Onlyfans and Chaturbate.
Every client will obviously have different needs but what’s your general approach?
The thing is that I do tax. And I've got a bookkeeper who doesn't care about whether you're a sex worker or whether you're a builder. In fact, she's got a few of my clients: a few sex workers, a painter, a builder. I've got associates that will do company accounts with me – mortgages, financial advice – but we work together on a few things. With most adult workers, that's their only job. The variation in other work is wide and varied from any number of different day jobs. That’s something I’ve noticed over the last 10 years.
I think in those industries, when it rains, it pours, and then you can have long droughts. And so all of a sudden, it's like, “Oh, I could do this as well on the side”. But all the money ends up in the same place because as a sole trader, everything goes together. But it's all going to be dealt with differently.
Broad question, but what are some of the difficulties that sex workers face when it comes to tax or other financially related things like applying for home loans?
Well there’s obviously discrimination. So the amount of “entertainers and models” I've got in my books is incredible. I've spoken to the Australian Taxation Office (ATO) on a number of occasions. And I've gone, “Well, here's the deal. My clients in the adult industry, but they don’t want to say they’re in the adult industry, because otherwise there's potential for discrimination. And the ATO goes, “As long as it’s similar, like “entertainer”, otherwise they’ll be like, “Why is a builder claiming lingerie?” I actually do have one, she’s in engineering. And she's also a stripper.
But the banks will discriminate, also. And mortgage brokers. Basically, there's lots of people out there that either actively dislike the idea, or just have no understanding of it. I usually start my conversations with the ATO like, “How do you feel about sex work?” And some people are like, “What do you mean? What are you talking about?” And they won’t know so I ask them to patch me through to someone else. And then there's other times when I ask the same thing, and they’ll be like, “This is gonna be the best conversation I've had all day”.
If I'm talking about sex work, there's no point fooling around. I'm sort of the gatekeeper between the ATO and my clients.
Have you had trouble with the ATO?
I mean if I start my conversations like that then not really. I have had one problem for one client. Effectively, her boyfriend was pretty much pimping her out and taking a lot of money. And we declared a lot of money. They were telling us that she owed a certain amount of money over the years and I'm going, “Look, this is financial slavery”. Even though the money she was receiving was in her name.
I got some manager who saw her name and was like “nah, you owe money”. So we went down the same path and increased her expenses by the same amount they had increased her income by. In the end after about six months we came to an agreement. It would have been a huge court case if we tried to fight it but the client couldn't afford a lawyer. I'm not a tax lawyer. I'm a tax agent. Word to the wise, all the money that comes from overseas cam sites does get reported to the ATO so you should be aware of that.
I'm assuming that for a lot of sex workers, their income is cash. Does that have to be put on their tax return?
Just because you earn money and its cash, doesn’t change the fact that it’s income. Tips in the pub to bar staff is income.
The fact of the matter is that most of the time no one ever declares their tips in a bar. With dancers, everything's a tip, effectively. Because they're not paid to be there it’s all based on tips and dancer dollars. But yeah, everything's income if you’re dancing or working in a bar.
I don't care if it's cash under your bed in a thigh-high Pleaser box. It's still income. So you've got to declare it. And there's an advantage to declaring. If you’re just spending it on going out and buying clothes, it doesn't really matter. But the reality is if you want to get a mortgage, credit card, some sort of subscription account, you're gonna need proof of income. If your income says you're on the dole, or you're not paying any tax because you're under the $18,200 bracket, then they're not going to give you anything.
Most dancers, it's cash. A lot of independent escorts, they get deposits. So there'll be an electronic record but they're not handing out invoices as guys aren't asking for receipts. So it’s all about record keeping.
What's some of the worst advice that you've heard or that sex workers should avoid from accountants?
Well, I had some of my really good clients mystery shop, because I know that there are accountants out there and tax agents that have never had sex workers on their books. There's certain things that sex workers can do that I caught with my mystery shoppers. Quick example: I had a client who asked if they could claim a boob job, and the accountants said yes. You actually can’t. Although there is the argument that if you’ve had a mastectomy, and they needed to get their boobs back for work, I think we'd have a solid argument. I don't know how it would go as I haven’t been in that situation yet.
Another example is hair extensions. If they're sewn in, they're not claimable. If they're clip-in they are. Why is that? If they’re sewn in you look good while you're working, but you also look good when you go to your friend's wedding. Clip-in can be taken out. It's like, if you wear a suit to work and it's just a nice black suit. Well, that's not claimable. If it had a logo on it saying sex worker, then all of a sudden it is.
I’ve heard people just talking amongst themselves, saying, “Just tell them you live off your boyfriend, or your girlfriend, or you live at home with your parents and they pay for everything. So you don't need to have any money.”.And that’s just fraught with danger, because if you break up with your partner and it's a nasty breakup and for whatever reason the ATO comes knocking and goes, “Were you supporting this person?” and they go, “Get fucked. I wasn't helping them”. Then all of a sudden, cats out of the bag.
Are there a lot of loopholes?
Look, there's tons of them. And these people have got them all wrong. Every single test question I gave to my clients to take to them got it wrong. And so that's incompetence. Then there’s people that will be like “I'll do your tax but you're gonna have to pay me and give me a handjob as well”.
A sex worker might feel like they’ve got a lot of money coming in but when it comes down to it the ATO is gonna go, “prove it”.
When should sex workers declare their income?
Everything is usually done at tax time, unless it is registered for GST, and then it's quarterly. But unless they're running a company and paying themselves, which some workers do, companies paying their staff will tax, they receive super, and will also be covered under workcover.
But if you think about it most workers are just collecting cash and hopefully keeping records. I actually do a consultation that takes about an hour on that particular subject: what you can claim, what you can't claim, how to keep your records, the easiest way to keep your records, all that stuff. And that's quite popular.
So most of the time your clients are actually paying when they do tax? So they owe money to the ATO?
Yeah, my job is to reduce their money, the amount they owe, as much as humanly possible.
I also write income verification letters for finance, rental properties and smaller finance areas. The key here is verification, I have to see proof before I can write one, just telling me you earn $100,000 is not enough.
And I won't lie for people because it's not worth it. I tell them to find another accountant.
What should a sex worker look for in an accountant to know that it's a legit business?
How long is a piece of string?
I get a lot of people that come to me going, “I really didn't think I was getting the best service from so and so. And I really wasn't comfortable with it. And so I've heard about you or I found you on the internet”.
I give them a quick meeting of 15 minutes for free. Sometimes it goes longer. And we can work out what it is they need and how we’re going to resolve it. Most people are happy with that.
There's people who are willing to rip off sex workers. It's unfair, it's unjust. But that's why referral is obviously the best plan. If you're hunting around, be a bit wary, ask a few questions. You won't have much time to get a feel for them, but you should be able to.
Update: This story has been updated to provide clarity around certain terminology and phrases used in both the sex work and accounting industries.