Page last updated at 20:03 GMT, Friday, 18 September 2009 21:03 UK

Denial over lap-dance tax breaks

Corporate visits to lap-dancing clubs exclude women, Ms Harman says

The Treasury has denied firms receive tax breaks for corporate visits to lap-dancing clubs.

Equalities Minister Harriet Harman had petitioned the chancellor to end tax relief on such events which she argued excluded female employees.

However, the Treasury said corporate entertainment of any kind was not deductable for tax or VAT purposes.

Firms can claim back VAT for trips which were "genuinely related to developing staff", a spokesman said.

He said HM Revenue and Customs would likely have to examine whether such a visit to a lap-dancing club had been "wholly and exclusively for the benefit of business", and would more likely be seen as a "gift" or perk.

'Exploitation of women'

Ms Harman told a meeting of equality campaign group the Fawcett Society on Thursday: "I will take up the issue of tax relief, because there is a whole host of rules around tax relief. For example you can't get tax relief for childcare, which is necessary for you to go to work.

"Why should you be able to get tax relief for a night out at a lap-dancing club where effectively you are discriminating against women employees in doing so?"

Ms Harman's office said on Friday that she had raised the issue with Chancellor Alistair Darling, but was yet to receive a reply.

A spokeswoman said Ms Harman had told the Fawcett Society, which informed her of the issue, she would go away and raise it with the chancellor "and that's exactly what she did".

However, a Treasury spokesman said it appeared Ms Harman had been misinformed.

"Corporate entertainment of any kind is not deductible for corporate tax or VAT purposes.

"Knowingly claiming for corporate entertainment is tax fraud and those who try to evade their legal obligations will face penalties in addition to paying back any evaded tax"

'Targeted marketing'

Kat Banyard, of the Fawcett Society, told the BBC Ms Harman had "made a really important announcement".

"What our report... showed is that the use of lap-dancing clubs in corporate entertainment is being fuelled by specific marketing towards the corporate sector by lap-dancing club owners.

"We know that in London 86% of lap-dancing clubs offer discreet receipts so that employees can claim back expenses through their company without it being apparent that the money has been spent in a lap-dancing club.

"And I think crucially that kind of practice is illegal, it's in violation of the Sex Discrimination Act so it most definitely shouldn't be funded by the taxpayer."

Chris Knight, of the Lap Dancing Association, said the industry had seen a drop in corporate spending in recent months. He also denied visits to lap-dancing clubs excluded women.

He denied they were part of the sex industry, but were "clubs with entertainment".

"Sex is not for sale in any of our venues, " he said.

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