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It means that the lap dancers must pay VAT themselves, although they only have to be VAT registered if they earn more than £60,000 per year.
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PCG said the step was a positive move that would go some way to clarifying the confusion and inconsistency surrounding workers who are neither employees nor employers.
Chris Bryce, Deputy Chairman of the PCG said: “This is a good decision for the rights of freelance workers. However, it’s a pity that it took a court case to bring about this clarification and simplification of the law. This case is yet another that underlines the urgent need for the UK to give people the right to be self employed instead of muddling through the inconsistencies that exist for people who don’t fit the definition of employer or employee.”
Providing the service
David Milne QC representing Spearmint Rhino argued that the club should not pay because it was the dancer and not the club that provided the services. Self-employed dancers pay to use its facilities and are paid by the clients.
The original ruling was made on the basis that the dancers were the agents of Spearmint Rhino because of the degree of control the club has over them through their Dance Performance Licences.
A statement from HM Revenue and Customs said, "HMRC will consider the High Court's decision carefully before deciding what further action to take, including whether to appeal."
Airport
Mr Milne drew a parallel between operators of lap dancing clubs and airports.
He pointed out that if he were to buy a cup of coffee or a camera from an outlet in the departure lounge at Heathrow, it would be supplied by the retailer and not by the airport's operator, BAA.
He said that the retailers paid for the "privilege of trading in the lucrative departure area" just as the dancers pay for the use of booths at the clubs.
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The Editor
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