Tax and self-employment
The ordinary self-employment rules apply, in full. What HMRC expects, with the current figures and deadlines.
Escorting income is taxable, the rules are the ordinary self-employment rules, and nothing about the trade changes them. This page sets out what applies. It is a summary of published HMRC guidance and not tax advice; anyone with a complicated position should speak to an accountant.
The starting point
HMRC's Business Income Manual at BIM22005 states that income tax is charged on the profits of a trade and that this basic position is not affected by the fact that the activities, either in whole or in part, are illegal. BIM22008 adds that liability depends on statutory construction rather than moral disapproval. Whether an activity is lawful has no bearing on whether its profits are taxed.
Sources: gov.uk BIM22005 and BIM22008.
The trading allowance
The first £1,000 of gross trading income in a tax year is covered by the trading allowance. Below that, there is nothing to register and nothing to file. Above it, Self Assessment applies. The allowance is £1,000 for 2026/27 and has not changed since it was introduced in April 2017.
A separate change has been announced but not brought into force: the government said in March 2025 that the Self Assessment reporting threshold for trading income would rise to £3,000 gross, with a simpler online service replacing the return for those below it. No commencement date has been set. It would change who has to file, not how much tax is due, and it is not the position today.
Dates that matter
| Obligation | Deadline |
|---|---|
| Register with HMRC, first time | 5 October following the end of the tax year |
| Paper return | 31 October following the end of the tax year |
| Online return | 31 January following the end of the tax year |
| Balancing payment | 31 January |
| Second payment on account, where due | 31 July |
The UK tax year runs from 6 April to 5 April. Missing the filing deadline triggers an automatic penalty whether or not tax is owed.
National Insurance
For 2026/27:
- Class 2 is no longer payable. Profits at or above the Small Profits Threshold of £7,105 are treated as though Class 2 had been paid, which protects entitlement to the State Pension at no cost. Below £7,105, nothing is due, but voluntary Class 2 at £3.65 a week can be paid to keep the record complete.
- Class 4 is charged at 6 per cent on profits between £12,570 and £50,270, and 2 per cent above £50,270.
Both are collected through Self Assessment. The flat compulsory Class 2 charge was removed from April 2024; the class itself still exists in the two forms above.
VAT
Registration is compulsory once taxable turnover passes £90,000 in any rolling twelve-month period, and the deregistration threshold is £88,000. Both figures have applied since April 2024 and are unchanged for 2026/27. Very few escorts approach either.
Making Tax Digital for Income Tax
Quarterly digital reporting is being phased in by income level:
| From | Qualifying income above | Measured on the tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
Qualifying income means gross self-employment income plus property income. HMRC identifies affected taxpayers from the relevant year's return and writes to them.
Records
The requirement is that the figures on the return are complete and correct, which in a cash trade means writing income down as it is received. A dated line per booking with the amount and any travel charged is enough. Records should be kept for at least five years after the 31 January filing deadline for the year in question.
Deductible expenses are those incurred wholly and exclusively for the trade: listing subscriptions, travel to bookings, a proportion of phone costs, and specific items bought only for work. Ordinary clothing generally is not deductible however necessary it feels, because it also serves a private purpose.
What to call the trade on the return
The self-employment pages ask for a description of the business. HMRC publishes no rule on how specific it has to be. Broad descriptions such as adult entertainment, personal services or companionship services are commonly used. What is not optional is the accuracy of the income and expense figures, which are declared as complete and correct and carry penalties if they are not.
Nothing about registering with HMRC puts an escort on a public register or discloses the trade to anyone outside HMRC. Tax records are confidential. The far more common problem is the opposite one: unreported cash income surfacing later, when it is expensive.