Escort ordered to pay £120,000 in tax

A student who made more than £300,000 from working as an escort has been told she faces a second jail sentence if she fails to pay the tax she owes.

Donna Asutaits, 30, has already served a two-and-a-half year sentence for tax evasion, after failing to file tax returns while she studied for a master's degree at the University of Westminster. But yesterday, the Daily Telegraph reports, she was told that she must still pay the tax that she owes or face a second jail term.

Asutaits was earning as much as £1,000 per night, enabling her to buy an apartment in London's Knightsbridge with a cash deposit of £120,000. While her precise earnings are unknown, she has been ordered to pay £120,000 in tax, as well as over £54,000 in court costs.

"I am told about extensive talks between the parties and it is thought that a fair resolution has been agreed," said Judge Peter Testar.

Defending, Stan Reiz told the court that Asutaits will sell her flat to pay the debt. "She has suffered from depression and has taken illicit drugs, and has dropped out of her master's degree," he said.

Back in 2008, prostitute Angela Nangle successfully defended herself against charges of tax evasion on the grounds that prostitution was illegal and she hadn't realised tax was payable. But the HMRC website is clear.

"If the activities of a prostitute or any other person deriving income from prostitution are organised in such a way as to constitute a trade or profession, the profits are liable to income tax," it reads. "This was confirmed by the 'Miss Whiplash' case, CIR v Aken [1990] 63TC395."

Tax is not only payable on monetary payments, but also on presents such as jewellery. But, on the upside, escorts can claim expenses like everybody else - for everything from business cards to handcuffs.

"People who earn money should pay tax on that income and escorts are not exempt from this - HMRC are sending a very public message to escorts that they need to pay their taxes," comments Nick Morgan of the Tax Investigation Alliance.

"At the same time Donna is a very soft target. There are still large companies and wealthy individuals who dodge tax by slipping through the cracks - and these cracks need to be closed up."
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