bence vardag times two

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.

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Comments

Lydia 02 October 20 09:28

I was working on a transaction last year and my client, the other side's client and even the other supposedly UK law firm were all based offshore not paying much tax (all within the law). I wonder who is the mug in all that...... May be if UK tax rates came down to reasonable levels eg 20% NI/tax flat tax fewer people would do that

[ And it is no secret one of my children was my trainee albeit he/she moved elsewhere on qualification.]

Adam 02 October 20 12:20

Given Mr Bunce's coyness about answering the question, allow me to do so on his behalf

Her sons are trainees.

Anonymous 02 October 20 14:43

Well done to Lydia for refusing to impose a gender on her child. It's no business of a parent (or a teacher, or a doctor, or anyone else) to dictate a gender to a child. The only person who has any right to decide whether a child is a he or a she is the child themselves, trying to force them into the pigeonhole of 'he' or 'she' based only on their physical genitalia and before that child has self-defined their own personal identity is basically engaging in child abuse. 

Jester 02 October 20 16:39

A non-dom transforming (taxable) UK source income into (non-taxable) foreign income, right? 

tan_gent 02 October 20 18:57

Solid, if potentially brazen, use of the SME transfer pricing exemption. With more than 50 employees and revenue over €10m (making them medium, rather than small) might coverage of the arrangements prompt HMRC to issue a transfer pricing notice to bring these arrangements within the transfer pricing rules? 

Anonymous 03 October 20 00:23

At least Fiona Shackleton does it with style. This lot look they've been styled by the Changing Rooms team.

Anon 03 October 20 01:26

Seems like both kids were given training contract. A quick google and LinkedIn search shows clear evidence that both are trainees. Both seem to have a good CV so not sure why they are there.

Annonymous 05 October 20 09:17

I am shocked to hear that Ayesha and her husband do not pay taxes in this country. She appeared on Question Time last year and had the audacity to comment on how the Government should be prioritising it’s spending. She even went so far as to say town halls should be opened up to house the homeless. Maybe she could open up some of her soon to be empty offices for the homeless and also pay some taxes to help this country out of its looming recession. 

anonymous 05 October 20 12:01

Just another example of rich people using their intellect and resources to not pay tax, can you blame them? The middle class pays all the tax in this country. 

Anon 05 October 20 17:52

On Question Time, Vardag also said that the NHS was underinvested.  Now we know why there isn't enough money to spend on the NHS.

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