The taxman vs the prostitutes

Prostitutes have to pay tax on their earnings, so why isn't their business entitled to same protections as everyone else?

This week’s news regarding Donna Asutaits, who was jailed after earning more than £300,000 in two years and failing to declare tax, is a reminder that prostitution is taxable. Well, more taxable than Goldman Sachs or Vodafone, at least.

The story of how the trade came onto HM Revenue and Customs’ somewhat hit-and-miss radar gives an interesting little insight into its relationship with the state. I decided to talk to a man who could tell me more. While he doesn’t want to give his name, he goes by the online moniker of Jolyon K Jolyon (he’s a fan of The Forsyte Saga), and he’s now a retiree, living in the West Country.

Some years ago, he was running an accountancy practice. He found himself acting for a lady who told him she was a dental technician, but the more he looked into her records, the less they stacked up. Why, for example, was she always paid in cash? He held a meeting with her, and she admitted she was a prostitute. Undaunted, he decided to continue working for her, and soon she introduced him to more women working in the same industry.

Jolyon is rather knowledgeable on the history of this issue. He tells me it was resolved back in the 1980s, when the famous madam Lindi St Clair underwent a series of investigations after she refused a discount to a cross-dressing tax inspector. Jolyon’s website tells the story in full, but a précis runs thus. 

After the first investigation Lindi appointed a proper firm of Certified Accountants to act for her, and they recommended forming a limited company as a way of saving tax. The following year the Attorney General successfully applied to the High Court for the registration to be quashed. A series of legal battles were then waged between St Clair and the Revenue, in which she drew attention to what she felt was the hypocrisy of the state.

You could argue she had a point. During one police raid, the Vice Squad discovered Lindi sitting quietly in the lounge, with a vicar in a gas mask handcuffed to a wall, a straitjacketed member of the House of Lords shut up in a cupboard and an MP chained up to a dog kennel in the garden. At one point she appeared before the Appeal Court judges dressed in fish net tights, a low-cut shiny PVC dress, and a steel-studded belt from which handcuffs dangled: “I felt that if I were to be taxed as a tart, I would appear as one.”

Lindi’s barrister argued that although prostitution is lawful it can’t be considered a trade because a prostitute cannot do things such as advertise, go into partnership, form a limited company, employ people, rent premises or sue for debts. She lost the case and her subsequent appeal at the Court of Appeal. The judges said: "[Prostitution] consists in the supply of services for reward on a commercial basis. Although the bargains made between the prostitute and her clients are unenforceable as being contra bonos mores neither the bargains made nor the services supplied are illegal in the sense of being prohibited…" In English – what you’re doing isn’t illegal even if everything surrounding it is, so pay up.

The case is cited by HMRC as the judgement that confirms prostitution is taxable. “But even today, there’s a huge misconception about what the law is,” says Jolyon. He feels that the big problem lies with the legislation on brothel keeping. This – unlike prostitution, is considered a crime. Common sense dictates two fairly simple things: one, prostitution won’t go away any time soon (something about that whole "oldest profession" thing), and two; the women doing it are safer working indoors with a maid, rather than working on the street.

There’s neither rhyme nor reason to this law, besides the rule that for every outraged Daily Mail headline there’s an equally cowardly political reaction. This could be seen in action a few years ago, when Labour announced it was looking into allowing small groups of women to work together, the Mail newsdesk editors had to be mopped down with a moist towelette, and the idea was quietly junked.

The common argument against is that there’s an epidemic of trafficking which requires the police to clamp down on brothels as and when they choose. The problem is, the last time an MP tried to cite data to support it, it turned out they were drawing on statistics drawn up by that well-respected institute of independent research, the Daily Mirror (as a side note, it's never a good idea to cite this as a source in Parliament and then go on Newsnight, on the off-chance Jeremy Paxman rips you a new one - see below).

Jolyon says: "The women for whom I worked simply made a hard decision and did the work with their eyes open. If people are paying taxes on their business they should be entitled to the same protection as anyone else. There are already laws to protect from trafficking and slave labour – what makes the sex industry different?”

I tell Jolyon I know of one case where the officers who closed down a brothel had, for a period prior to the closure, been making use of its services – and have described another case at length, where the police’s behaviour could best be seen as reprehensible. It’s an inconvenient truth that the cops get a share of the frozen assets when they close a brothel down.

Jolyon tells me the authorities make it impossible for brothels to function above ground: “Accountants are part of the regulated sector – they’re bound by money laundering regulations, so if they come across a brothel they’re obliged to tell the Serious Organised Crime Agency, and can’t tell the client that that’s what they’ve done. Similarly, no accountant wants to take on a client which at any time could be closed down under the Proceeds of Crime Act. That’s why I only worked for women working on their own.”

As I wrote last month, the authorities have been quietly trying to “clean up” the Olympic boroughs. In that case it was a police-lead exercise – but Jolyon tells me about another operation I hadn’t noticed. According to a press release Operation Vermont, was “a multi-agency exercise which ran for six weeks in May and June. During this time 31 businesses were suspected to be underpaying workers, or were considered a significant risk requiring further HMRC investigation.”

Jolyon concludes: “It’s interesting that they targeted things like fast food outlets and mini cab offices, rather than brothels – you’d think they’d be the first port of call, if the industry is as sordid as they make out.” Donna Asutaits claimed in her defence that she was simply naive in not paying tax. One might raise an eyebrow at the idea she could earn so much money and assume it wasn’t taxable. But given the long-standing stigma that has emanated from government on this issue, she might well have been telling the truth.


A Soho prostitute waits for some custom. Photograph: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

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Testing migrant children’s teeth for their age is not only immoral – it doesn’t work

Ministers have flirted with this idea for over a decade. It’s bad policy, as well as poor ethics.

This week, the Home Office finally ruled out the use of x-rays to establish the age of childhood migrants.

It’s welcome news, but this story predates the dispersal of the Calais “Jungle” camp. 

For over ten years, ministers in Conservative and Labour governments have flirted with these tests. And it’s been up to us – the practitioners who’d be expected to administer them – to pick holes in a policy that’s a great way of securing headlines, but simply cannot deliver on the claims made by its cheerleaders.

It goes without saying dentists are health professionals, not border guards. But our objections run deeper than that. And it’s worth revisiting the arguments, just in case future governments start grasping for silver bullets.

It’s ineffective

We can talk about philosophy later, but let’s start with a pretty fundamental objection: dental x-rays are simply not a reliable way of establishing age.

No two mouths are alike. I’ll add my own to that list, as I still sport two of my baby teeth.

Children and young people mature at different rates, so the level of accuracy in these tests changes with time. And these x-rays can estimate age in younger children much more accurately than in adolescents. So as children mature at different rates, the potential margin of error gets ever larger with age.

For example, the third molars, commonly known as wisdom teeth – the last permanent teeth to develop – can form any time between the ages of 16 and 23, and a small proportion of individuals never develop third molars at all (I’ll have to pop my name to that list too).

A 2010 study of 300 young people aged between 11 and 25, whose age was determined based on dental x-rays, showed this method of testing consistently over- or under-estimated age, with a two-year average difference between dental and known age.

So if you are searching for a litmus test that will tell you whether a subject is 17 or 19 years old you won’t find it here.

It’s inappropriate

A few MPs and pundits have found it hard to acknowledge the codes health practitioners sign up to, which make this test a no go.

We must always act in the best interest of our patients when providing a medical procedure. And it is beyond question that the process of radiography is a medical procedure that should be carried out only for medical purposes, and where the patient stands to benefit.

Now many people might not consider this test an invasive procedure. However, x-rays do carry a small risk of possible long-term physical impact, and current best practice in this area dictates that exposure to radiation should be kept as low as reasonably possible over a lifetime. They should be carried out sparingly and where there is a well-defined potential clinical benefit, which must always outweigh the potential clinical harm.

As taking x-rays to determine the age of an individual carries no clinical benefit, it frankly isn’t appropriate to expose a patient to the potential clinical harm it can cause.

It’s unethical

Our lawmakers cannot simply dispense with fundamentals like consent to show they are “taking action”.

It is a legal principle that before practitioners carry out any medical procedure, the recipient – or someone who can consent on their behalf – must be given a full understanding of the nature of the procedure, its significance, impact and potential consequences before signing up to it.

For the children arriving from Calais, this would be a difficult task without English as a first language. Consent may also be required from a suitable adult. Yes, these children may be unaccompanied, but it does not mean the need for valid consent and protecting the child’s best interests can simply be ignored.

The letter of the law might be inconvenient, but it is a requirement that can only be compromised where the urgency and necessity of the circumstances demand rapid action in a patient’s best interests. And even in these circumstances the validity of treatment has sometimes ended up being challenged in the courts.

Given that taking x-rays in order to determine age is not medically justifiable in the first place, the urgency justification really doesn’t come into play. And that means dental colleagues – in the absence of valid consent – could find themselves performing an act that constitutes a criminal battery.


In the past, ministers have debated whether there is a credible “public interest” case that might override these little legal or philosophical objections. But these practical and ethical concerns can’t really be separated.

But why bother constructing a case for a test that frankly isn’t much cop? Dentists can only hope the latest message from the Home Office marks the beginning of a consensus, which draws a line under a decade of wishful thinking.

Judith Husband, Chair of the British Dental Association’s Education, Ethics and the Dental Team Working Group.