The President and Director of Strategy of Vardags meet their two best-paid consultants.
Vardags, the divorce specialist law firm which banned cardigans, has defended paying its two owners millions of pounds in 'consultancy fees' while claiming the business is now too cash-strapped to avoid making staff redundant.
Ayesha Vardag is the firm's President and its majority shareholder, while her husband, Stephen Bence, is the minority shareholder and its Director of Strategy.
There are five other directors of the firm, who together with Vardag and Bence were paid salaries out of a £1.23 million pot in 2019. Vardags' accounts do not break down the amount distributed to each of the directors, but if they each received an equal share Vardag and Bence would have been paid £176k apiece.
However, the divorce power couple received millions more from their firm via two consultancies registered in Dubai.
Vardags Management Consultancy business, which is run by Vardag, invoiced the firm £2.6 million for ‘management consultancy fees’ in 2019. In 2018, it charged the firm £2 million.
In 2019 Vardags also paid £716,000 to a consultancy run by Bence. According to Bence's profile on Vardags’ website, Spin-Out Strategy "provides strategy consulting to high growth technology-enabled businesses". Spin-out Strategy is listed as having just two clients on Bence's LinkedIn profile - Vardags and another business he owns.
Vardags paid £87k in UK corporation tax in 2019. But thanks to its relationship with Vardags Management Consultancy and Spin Out Strategy, in the last two years the firm was able to pay over £4m to the couple without HMRC getting a nibble. Reducing exposure to the taxman further, Vardag, who is based in Dubai, is understood to hold non dom status. There is no suggestion of any wrongdoing.
RollOnFriday asked Vardags why the firm paid Vardag as a director and then paid her again via her consultancy, and why the firm paid Bence for strategy advice as its Director of Strategy, and then also paid him for strategy advice via his consultancy business.
The firm was also asked how much it planned to send out to the UAE this year, and whether a proportion could instead be made available to pay the staff now at risk of redundancy.
In a statement, Bence said, “The numbers that you are quoting are publicly available on Companies House in Vardags’ audited annual accounts for the financial year ending 31 March 2019. Eighteen months on the world is a very different place. Our audited annual accounts for the current financial year are due to be published by 31 December 2021 at which point anyone will be able to review them".
He declined to respond to reports from multiple sources that the firm had also given training contracts to Vardag's children.