OnlyFans: Keep Records to Protect Yourself
Records are the root and branch in obtaining a good outcome in an Only Fans tax investigation.
If you find yourself the subject of any form of tax enquiry or investigation, the better records you have, the better defence you or we can put up for you.
It’s not impossible to represent a client who has little or no records, as we see this regularly, but of course Only Fans models will have records or access to them through the Only Fans platform.
In fact it’s fair to say that if you receive a letter from HMRC they will have already approached Only Fans in advance and will have good details of the income that has been paid to you and the commission deducted, by getting it straight from the source.
This information however is not fool-proof and often not always 100% correct and we will always challenge their figures and seek to reduce them of course, but the better records you have of your expenditure the less tax you are likely to pay.
Your bank accounts and other records are the first base in establishing your total income. HMRC have the legal right to see any bank account into which your takings have been deposited or from which business expenditure has been paid. The same goes for any credit card you use for business purposes.
If you use your personal bank account to receive money from the Only Fans platform then HMRC will have the right to see these personal accounts.
It is much more preferable always to use a business account. In that business account you should bank all business takings and use it to pay all business expenses. It is much more confusing when you or the accountant (or HMRC!) have to analyse what can be private receipts and private expenditure to ascertain the business element from your private bank accounts. It can also be intrusive when HMRC get to see every penny you spend and even things like a Christmas present from a parent or family member going into your bank account.
Through your bank account benefits claimed are clearly visible. Certain benefits, are classed taxable income and these should also be declared.
There are also monetary limits to the receipt of child benefit historically and this should be looked at if your turnover exceeds these limits and this could end up being repayable to HMRC.
Likewise with child tax credits or working tax credits, we have seen these claimed regularly by Only Fans models and in a tax investigation these become a red flag if it turns out that entitlement to such benefits have been claimed in error.
Some find it embarrassing to deal with a tax investigation or enquiry themselves particularly when HMRC may have access to your banking and benefit claims. It is therefore more preferable to deal with a friendly experienced advisor with whom you can discuss matters one-to-one and receive the advice you need without judgement.
No one ever died of embarrassment and you will not be prosecuted in a routine tax investigation or even one under Code of Practice 9 provided that you enter into the process honestly and openly with them. Through us this can easily be achieved. Please call us to discuss any concerns you may have.
Call Andy Rusling on 07879 464577, Lindsay on 07584 706664 or email us for a prompt reply.
