Cherie forced to pay tax on pearls


Last updated at 10:25 25 September 2005

Cherie Blair is involved in a new controversy after senior Government sources said she was made to pay VAT and duty on expensive pearls she bought on foreign trips after a Customs and Excise inquiry.

Customs chiefs took action after it was revealed that the Prime Minister's wife imported pearls and other jewellery for which she had paid around £3,000 on three trips to China in the past eight years. Chinese jewellers who had supplied her insisted the true value of the items was at least £15,000.

Senior Customs officers are understood to have contacted Downing Street last week after establishing that she paid no VAT and import duty on them when she returned to Britain.

According to one source, Mrs Blair was forced to pay the full VAT and duty, though it is not known how much. Customs and Excise did not impose a fine, which can be applied if an individual has deliberately tried to avoid the levies.

The source said that Mrs Blair was then told that the matter was closed and that no further action would be taken against her.

Tax and duty paid

Responding to The Mail on Sunday, Mrs Blair took the unusual step of authorising Customs and Excise to make a statement about the inquiry into her conduct. A Customs and Excise spokeswoman said: "Customs inquired into the circumstances and as far as they are concerned there is nothing to investigate.

"On this occasion the individual gave consent for their right to confidentiality to be waived."

It is understood that the reason the matter was considered closed is because Mrs Blair paid the VAT and duty retrospectively.

However, a senior Government source confirmed that Customs officials did make inquiries at Downing Street to find out why Mrs Blair did not pay VAT and duty on the goods.

When The Mail on Sunday asked Downing Street to confirm that this was the case, a spokeswoman said: "We have no further comment."

Until yesterday, No 10 had claimed that this newspaper's reports of Mrs Blair's jewellery purchases - and specifically whether she had paid VAT and duty on them - were 'wildly inaccurate'. But it would seem she did not pay, and has now been forced to do so.

The disclosures are bound to raise new questions about the way Mrs Blair uses official trips abroad to obtain cheap goods for herself.

Shops asked for discount

In addition, a police source claimed that on occasion she has asked the Special Branch security officers who travel with her and her husband to arrange 'after-hours' visits to shops to buy goods without being distracted by other shoppers.

The source also said that Mrs Blair had asked the police to ask the shops whether she could obtain discounts.

Meanwhile, the Prime Minister was dragged into the row after it emerged that both he and Mrs Blair bought hand-made clothes from Chinese tailors during one of the trips.

Extraordinarily, they had three sittings with three different Chinese tailors days after Government weapons expert Dr David Kelly committed suicide at the height of the row over Iraq's weapons of mass destruction.

Dr Kelly was found dead on July 18, 2003. On July 22, the Blairs secretly had two sittings with Chinese tailors.

In the first, Mrs Blair bought a blue Chinese silk suit and Mr Blair bought a cashmere wool suit.

Tailor Lawrence Wu said that Mrs Blair haggled, forcing him to cut the price of the suits he made by £14 each. She paid £104 for hers and Mr Blair's cost £111, roughly one tenth of what it would cost in Savile Row.

From the second Shanghai shop, Mrs Blair is said to have bought three dresses.

The following day in Hong Kong, Mr Blair found time for a sitting with Manu Melwani, a celebrity tailor known as Sam the Tailor.

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