Should Sugar Daddy Allowance be Taxed in the UK?

sugar daddy allowance and tax

If you ask whether the sugar daddy allowance you receive in UK should be taxed, the answer to this question is that it depends on which perspective you are viewing it from.

Gift versus Payment

Perspective means being able to view it in different angle. If you view the allowance you get from a sugar daddy as a gift, then the answer would be no except when you consider the inheritance tax if the one who gave it to you dies in the next seven years. So, if the money you get as the sugar baby is purely a “gift” then there is no question whether you need to pay the tax for it.

However, if you receive the money on a regular basis such as weekly or monthly and it comes from the same person or multiple people then it is safe to say that this will be seen by financial authorities in a different light.

Sugar Daddy in the UK

If you compare UK with USA, sex work in the latter is completely illegal while the former is mostly legal and the money received are taxable. In the last 25 years, sex work in the UK has been taxed and a special HMRC department has been assigned to investigate sex workers as well as their escort agencies for any illegal actions or non-payment of taxes.

If you are earning more than £7 in a month, you need to register and pay value added taxes for your income, which is genuinely not a joke at all.

Understanding the Terms

Basically, the sugar daddy allowance when received by way of trade then the answer to the primary question whether it should or should not be taxed is that it should. HMRC will want a portion of that earning regardless of what you call it since you are operating under the term “trade.” So, what does this mean? Say for example, you build a profile on SA, communicate with people who can be potential SDs then agree to them a specific amount or payment for the services or time you offer, you meet up and you receive the fee you required before you do the deed are all implications that a trade has been made. You provide the services; the SD will provide the money as payment. This equates to trading goods for money – hence the term trading.

On the other hand, if you put up a profile and has been communicating with one person and came to a mutual understanding – that is he becomes your boyfriend – then this is an entirely different scenario. If you are more like an SGF rather than a sugar baby then a boyfriend who sends money so you can pay your rent, pays for your bills and other monthly expenses without expecting anything in return other than voluntary sex on your part – alone, this does not indicate trading. However, having multiple relationships like the one described, partly indicates trading since there is no commitment on your part.

In the same manner, casual trading such as occasional asking for a favor to the guy next door in return for sex does not amount to trading. However, having this kind of arrangement to other tradesmen in your town will probably have indications of trading.

Finances and HMRC

We can go on and on providing examples so you better understand the entire scenario and we can also go as morbid as we can with the examples. However, if you are a full-time sex worker in the UK, it means that you are using this as a “job” or an income generating deed.

Generally, if you confine your money-making activities to SA then it is imperative that you understand that HMRC would take little to no interest about your money unless the amount is rather huge and you are showing it off on social media.

The bigger the money is involved the bigger the curiosity of HMRC will be and they will sort this kind of thing out. But if the money involved is only to make ends meet then there is no absolute reason for you to be worried about whether or not you need to pay for the tax.

So there, should sugar daddy allowance be taxed in the UK? The answer depends on what perspective you are looking it from. Adequate research might be necessary in some cases but mostly the solution to this problem can be achieved only by analyzing the situation with so much clarity of the head.