Nigella Lawson and Charles Saatchi may face tax inquiry

Saturday, 4 January 2014 - 8:28am IST | Agency: Daily Telegraph

Charles Saatchi and Nigella Lawson could face an investigation into their tax affairs after their two former aides were cleared on fraud charges. Tax specialists said HM Revenue & Customs may contact the divorced couple to check whether gifts made to Francesca and Elisabetta Grillo and other employees were declared as taxable benefits in kind. The Grillos and other employees could also be pursued for tax on gifts such as holidays and expensive goods. The Grillos have never suggested they declared any of the pounds 685,000 they were accused of fraudulently spending on a company credit card, or that their employer paid national insurance contributions on it.

Jason Collins, a tax expert at Pinsent Masons, said: "If an employer provides an employee with anything that is not specifically needed for their work, that is counted as a taxable benefit. "So if an employer pays for an employee to go on holiday on their own, or pays for the cost of a wedding reception, as was mentioned in the trial, that should be declared as part of the employee's income and national insurance contributions are payable by the employer at 13.8 per cent. Not only that, but the value of the gift must be converted into gross salary, so if someone is in the 40 per cent tax band and their employer pays for a wedding reception that costs pounds 12,000, that would have to be declared as pounds 20,000 of income for tax purposes."

Collins said it was up to the employer to tell HMRC how much each employee earned each year, including gifts, and to pay national insurance, though it was up to the employee to ensure that they had paid the correct amount of income tax. The Grillos were paid by Mr Saatchi and held company credit cards in the name of Conarco, the firm he uses for his art trading. The credit cards were paid off each month by Mr Saatchi.

They told the jury at Isleworth Crown Court that Miss Lawson allowed them to buy thousands of pounds worth of clothes at a time to thank them, paid for their holidays and allowed them to buy handbags worth up to pounds 5,000 each. Mr Saatchi claimed he was unaware of the spending. His accountant, Rahul Gajjar, said the credit card bills were paid in full by Mr Saatchi each month. Nobody checked what the money was spent on. One of the sisters was initially employed by Miss Lawson. She employs three other personal assistants, who told of gifts including fitness classes, clothes and beauty therapies.

A spokesman for Miss Lawson said he did not know whether tax had been paid on the gifts but added: "Conarco was the employer." Mr Saatchi, who is still pursuing a civil claim against the Grillo sisters, could not be reached for comment.

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