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Heston Blumenthal Accused of Tax Sheltering, Failing to Pay Staff Overtime

Kitchen staff at the chef’s Australia restaurant say they work 25 or more unpaid hours of overtime per week

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Chef Heston Blumenthal in 2012
Photo by Oli Scarff/Getty Images

World-famous and Michelin-adored chef Heston Blumenthal is being accused of some atrocious business practices — including tax sheltering and failing to pay his employees overtime.

The acclaimed chef’s hospitality group includes six restaurants, the most famous among them the UK’s Fat Duck, once ranked the top restaurant on the globe by World’s 50 Best. All are operated through companies on the Caribbean island of Nevis, a notorious tax haven used by foreign companies in order to avoid paying taxes, according to reporting by the Sunday Age and the Sun-Herald.

The Melbourne outpost of Dinner by Heston Blumenthal is reportedly owned by a company called Tipsy Cake Pty Ltd, which per the Herald “is registered and incorporated through a post office box and office suite on Nevis” — the very same PO box and suite that are mentioned multiple times in the notorious Panama papers, millions of pages of documents leaked to the public in 2016 that revealed the extent to which the world’s rich, famous, and powerful go to to hide their money offshore.

A spokesperson for the Fat Duck Group avoided directly addressing why the company is routed through Nevis, saying in a statement:

The corporate structure of the Melbourne restaurant is a matter of public record. The group operates internationally within an existing trading structure. This allows the business to work efficiently in the individual markets. In the case of Melbourne, the operating company is fully registered in Australia. All applicable taxes for the business due in Australia are paid in Australia and the fact the company is incorporated outside Australia has no impact on its Australian tax liabilities.

The allegations involving unpaid labor center on Blumenthal’s lone Australian restaurant, with leaked documents allegedly revealing that chefs work 25 hours of unpaid overtime on a weekly basis. The Herald notes that the Melbourne business has reported losses each year since opening in 2015, meaning it’s paid no corporate taxes in Australia. Meanwhile, failure to pay kitchen staff overtime means they’re effectively earning around $15 to $17 AUD (about $11 to $12 USD) hourly, well below Australia’s current minimum wage of $18.93 AUD.

A spokesperson said in a statement that the company “[does] not believe there are any staff issues to address” but that it’s undergoing a full external audit “in the interests of complete transparency.” They also stated that these allegations relate only to Dinner’s Melbourne location, and that its employees in London do not work unpaid overtime. (Blumenthal, per reps, is not a named director in the UK businesses, and Dinner by Heston Blumenthal in London is Blumenthal’s in name only; the day-to-day running of the kitchen is left to executive chef Ashley Palmer-Watts.)

Using so-called tax shelters by setting up a business in Nevis is not a crime under Australian law. Failure to properly pay employees for time worked isn’t, either: While employees caught stealing from their employers can be punished with jail time, employers who engage in so-called wage theft do not face criminal penalties, and workers must often take civil action to reclaim lost pay. It’s an issue that’s been at the center of much debate in Australia recently, and as the Herald notes, the government recently announced its intent to make wage theft a crime punishable by up to 10 years in jail.

In the meantime, though, it’s seemingly up to diners to punish restaurants like Dinner that fail to properly pay their staff. As the Herald writes in a followup op-ed, “The patrons of top restaurants are very particular about other aspects of their food, many requiring it to be free of preservatives and perhaps free range to ensure the welfare of the animals. It is ironic that they are less concerned about those working on the other side of the swinging kitchen doors.”

Heston Blumenthal, the Tax Havens and the Ripped-Off Workers [SMH]

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