Skip to main content

Post-functional money and VAT

I genuinely did not know this, having never been to either of the noted lap-dancing clubs Secrets or Platinum Lace, but such establishments require customers to buy vouchers, a private currency, to pay the dancers. The dancers do not, as you might expect in the modern world, accept credit cards (even contactless fnar fnar).

The customers are charged an entirely reasonable commission on the exchange of fiat currencies for the private currency. Presumably there are safety and security issues that drive the use of the private currency but I do remember reading about problems that occur in transactions of a similar context where the recipient, generally a marginalised woman, is presented with a collapsing currency (eg, Sterling) and cannot be sure of the value and therefore whether to accept the cash of note.

Anyway, for whatever reason, there is a private currency is circulation. As a result, the clubs are in a dispute with HM Revenue & Customs over whether they should pay VAT on the commission they charge for exchanging customers’ cash for vouchers to pay dancers. The clubs believe this commission, about 20%, is a financial transaction and so should be exempt from VAT. HMRC thinks differently.

(Wait, what? 20%? Are they using my agent?)

This story is an interesting example of the use of what you might call "company money". It’s akin to the use of chips in casinos or Disney Dollars. You change fiat currency that is good anywhere into a form of electronic money that is useful in only one area.

Comments

Post a Comment

Popular posts from this blog

new survey results from USA Technologies (USAT) suggest. The payments technology company, which enables electronic payments for self-service machines, compared consumer spending activity at 35 of its vending machines in urban areas with a high concentration of iPhone users between week one and week four of the installation of new digital signage promoting Apple Pay. Consumers made more contactless purchases: The vending machine providers saw an average contactless transaction revenue increase of 89%, implying that consumers are making more mobile payments. This was likely driven by the clear advertisement of Apple Pay. Total transactions increased: Consumers made more purchases overall. This was probably driven by an uptick in mobile payments, given the major increase in contactless transaction revenue. And the vending machines may have attracted many first-time users who were drawn in by the digital advertising of Apple Pay. Boosting awareness is key to unlocking pent-up demand amon...
Post a Comment
Read more

David | LinkedIn

Alex Todd rather kindly called this a “most lucid explanation of digital identity management” I would highly recommend this presentation to anyone interested in understanding prospective blockchain based identity architectures From David | LinkedIn This is very kind, but as I said in the link, this is thinking out loud and far from a fully-developed solution. We’re working on parts of this for different clients and I can see that there is something there - a genuinely new way of solving some old problems - but it’s early days.
Post a Comment
Read more

Crystal clear: Creating hyper-transparent property markets - JLL Real Views

xxx The issue of transparency is going to play a major role in the allocation of an avalanche of global commercial investment into real estate over the next decade. With total sums at stake predicted to rise from US$700 billion to over $1 trillion a year by the mid 2020s, according to JLL, countries and cities which meet investor demands on transparency will be best placed to attract these capital flows. From Crystal clear: Creating hyper-transparent property markets - JLL Real Views xxx
Post a Comment
Read more