SWOP: Sex Workers Outreach Project. Inclusiveness, Respect and Self Determination.

Taxation

Anyone working in the sex industry in NSW may be contacted by the Australian Tax Office (ATO)—by telephone or in person. The ATO most likely will contact you at your workplace, and may use your advertising to find you. They may write to you at the address you give them and this may cause problems at home if people read, or illegally open, your mail. So plan ahead to protect your privacy, and sort out your tax contact details before you get that call or visit.

Tax Office enquiries—what happens when Australian Tax Office staff want information from you

If someone from the ATO visits you:

• ask to see their photo ID before you start to talk
• tell them you are concerned about your privacy and confidentiality
• ask what they will do to protect your information—you do not want other people, either at work or at home, to have access to your information
• ask them not to call through your details for checking while they are within hearing of other people at work, as this may breach your privacy
• if the timing does not suit you, ask to have the ATO officer’s card and call them to give your details at another time, or email or write to them with your details
• write down your name, date of birth and address details and hand it to them
• ask to use a work room in order to have privacy
• ask to have two ATO officers present to avoid potential improper or corrupt behaviour
• give only the required information
• if your tax is dealt with by an accountant or tax agent, refer the ATO to them
• if you have an Australian Business Number (ABN) simply give that to them
• give an appropriate address as they need to be able to contact you or write back—address options that are acceptable to the ATO include:
  • your tax agent or accountant’s address
  • a PO Box address
  • your residential address
  • another nominated address.

You must respond if the ATO write to you at the address you have given, otherwise this may result in stronger compliance action from the ATO.

If someone from the ATO contacts you by phone:

• it is OK to use only your work name
• it is OK not to give any details over the phone, as you cannot verify the caller is genuinely from the ATO
• ask the caller for their name and number and call them back.

NOTE: You can first verify whether someone is a genuine ATO officer by calling in with their name to the ATO’s general line on 13 28 69.

What information the ATO is entitled to

The ATO can ask for your name, address and date of birth in order to check your tax records. Under the law, you need to provide them with this information.

An acceptable alternative is to provide them with contact details of your accountant or tax agent, or to give your ABN if you have one.

The ATO also has the authority to enter premises to gain access to records such as shift records, job sheets and banking records.

Your records of earnings and expenses

You must keep your own records of your income and work-related costs so you can make a Statutory Declaration to the ATO of your income, or submit your Income Tax Return.

If you cannot provide records of your earnings you risk having the ATO estimate your income, after which you will be asked to pay any due tax.

All records need to be kept for five years. You do not need to send them to the ATO, but you must keep them as proof in case you are audited (they ask to check your records). Evidence of your costs might include:

• a cash payments and a cash receipts book (the ATO prefer this)
• days and hours worked (for example in a diary or calendar), including noting holidays or sick days when you were off work
• pay slips and/or tax invoices (receipts) from the places you worked for, which should show the business name, address and ABN of the workplace
• your banking records

• if you intend to claim work-related expenses as tax deductions, keep receipts (now called ‘invoices’ or ‘tax invoices’) for those items or services, including any shift fees or costs for working at a brothel or parlour.

Tax differences between being an employee, sub-contractor or sole trader

Different tax rules apply to employees, sub-contractors and sole traders. Although your employer might call you a sole trader or sub-contractor, you need to look at how your work is done to manage your tax responsibilities.

If you are an employee for tax purposes, your employer must pay your Pay As You Go (or PAYG) income tax and other payments such as superannuation.

But if you are a sole trader for tax purposes, you must pay your own tax on your income, and possibly GST if you earn more than $75,000 each year.

Whether you are classed as an ‘employee’ or ‘sole trader’, the brothel or parlour must give you appropriate records for your personal tax purposes.

When making a tax return you can call yourself an entertainer or performing artist. These categories allow for some of the same tax deductible expenses, such as costumes, make-up and similar things.

Getting professional help with your tax return

• There are several ways in which you can get help to find out about your tax liabilities:
• Look at the ATO website ato.gov.au or call the ATO on 13 28 69 and ask for the Adult Industry Project—you can use your working name or remain anonymous.
• An accountant or a registered tax agent can help you get tax matters organised.
• The Professional carries paid advertisements for tax agents who work with the sex industry.
• The National Institute of Accountants in Australia website is another place to look for these services. Visit nia.com.au.