I was a bit surprised, when logging into the phone app of Adultwork this morning to see a higher deduction than normal for displaying my telephone number. Many clients don’t realise that Adultwork charges both clients and escorts to use it’s service and to escorts it’s free of charge at the point of service but it quickly racks up to a yearly charge of £365 a year if you want to display your phone number on your profile every day.
Most escorts, like myself offer private galleries and offer cam sessions or phone sex chat to rack those credits up. I have never paid Adultwork for any services but I do display my number every day. I have never withdrawn my credits from the site and use a contra-payment to pay for my phone display charges. This worked very well and I didn’t begrudge them one little bit but in recent months, as I reported on my previous blog post last week, enquiries via Adultwork have dropped dramatically, partly I think due to the scandals online about third party sites which men and women have joined to look for sex.
For seven years before I took up escorting, I trained as a public sector accountant and I still practice accountancy to this day on a freelance basis. I am having trouble getting my head around how Adultwork are applying the EU VAT charges. I can understand that for every £10 uploaded for 10 credits, this is now technically worth £8 because the prices of sex chat operators and models has increased by 20% overnight. This is perfectly logical and I completely understand why they have done it. My direct chat fee has increased overnight from 1 credit per minute (£1) to 1.20 credits as has 24 hours access to my private pictures. Any models and phone operators wanting to charge their previous rates will have to reduce their requested fees by 20% if they wish to keep their prices at the previous level.
The thing I can’t get my head around, as an accountant, is why I am being charged £1.20 now to display my phone number. I have not uploaded any monies to Adultwork to pay to display my phone number and it has already been subject to VAT at the point of source (booking a sex chat or looking at my pictures). I haven’t asked for the monies to be refunded and they are the ownership of Adultwork (remember AW billed the customer for the credits). I could understand paying 20% VAT if I had uploaded £10 this morning and wanted to use the monies for purchasing a service from Adultwork but I don’t understand how they are then re-charging the money that was uploaded by a client again when no refund to the model has occurred. By using the internal services of Adultwork I am requesting credits, owned by them to be refunded to me in lieu of services. The way they are vigorously applying VAT is amounting to 40p in the pound, not 20p in the pound. The monies are being applied twice under the same VAT code. I will put this into very simple terms
Client Uploads £10 and spends 1.20 credits to view my gallery. 1 credit is applied to my account and 0.2 credits are going to the tax man. I then display my number the following day and am charged 1.20 credits for the pleasure now, 1 credit of my balance owed to me by Adultwork being refunded and 0.2 going to the tax man. From that initial £10, 1 credit was used (£1) and applied twice therefore 40p in the pound is going to the tax man. Surely that can’t be correct. I can understand it if I uploaded the money myself but I didn’t, it’s money owed to me that VAT has already been paid on within the same tax code.
I haven’t received any credits since it was applied but I suspect I won’t be getting 1.20 credits for a sex chat, I will be getting 1 credit and then having to pay VAT on monies already held by them on a third party basis. I am not an expert on digital EU VAT, it’s not something I have ever had to deal with but I would have thought that the VAT would have been charged to the end user of the monies held within the system, so for a 1.20 credit sex chat (including VAT) that would be paid to me and I would pay the VAT on the final use of the money (to display my number) or when I withdrew the funds via a self billing system.
I may of course be completely wrong but this has already got my head spinning. Having read the statement on the AW site, even I am completely confused by it all. How on earth do they expect the lay person in the street to understand this and by this I mean the escorts, models, chat operators and clients. The statement of facts from Adultwork is vague to say the least and I will be waiting in anticipation to see what credits are applied to me in the forthcoming days. I will update the blog and re-publicise it accordingly