Red Ed’s hypocrite Hobbit is a tax avoider
We know about the double standards of champagne socialists. But as this investigation shows, Labour’s new celebrity poster boy really takes the biscuit
WeRe elections won by celebrity endorsement, it would have counted as ed Miliband’s finest hour. On Monday, within hours of the formal start of the campaign, the Labour Leader unveiled one of Britain’s best known movie stars as his latest backer.
That star was Martin Freeman. And in a slick, three-minute YouTube video, Freeman declared Labour the ‘only choice’ for right-minded voters on the grounds that it alone ‘starts from the right place: community, compassion, decency’.
Viewers then saw the fashionably dishevelled 43-year-old actor deliver a series of Milibandian soundbites to camera.
In one, he claimed the Tories intend to take Britain on a ‘rollercoaster of cuts’. In another, he alleged that only Labour can ensure that the ‘ economy works for all of us, not just the privileged few’. In a third, he declared that Tories simply ‘don’t believe in the NHS’.
Thanks, presumably, to Freeman’s extraordinary celebrity status (the three Hobbit films, in which he played Bilbo Baggins, have made a combined £2 billion, while ten million viewers often watch TV’s Sherlock, in which he plays Dr Watson), this video-taped sermon promptly became an internet hit.
Roughly a million people have seen it on Labour websites, while a further 250,000 have watched on YouTube. This has made it what Labour calls ‘the most seen party-political broadcast ever online’.
Among those helping has been TV actress Amanda Abbington, Freeman’s partner of the past 15 years and the mother of his two children. She recently used Twitter to declare ‘F**K the Tories’, while encouraging her 188,000 followers to view the clip.
General elections are about substance as well as style, however. And on that front, awkward questions were soon raised about whether Freeman is an entirely appropriate figure to act as the ‘face’ of Labour’s election campaign.
Take, for example, the former The Office star’s boast, in this week’s film, of his commitment to ‘decency’ and ‘community’.
Some might feel he fell rather short of that in December 2012 when Abbington, who is perhaps best known as his on-screen fiancée in Sherlock, found herself facing a £120,000 tax demand from Her Majesty’s Revenue and Customs.
Back then, rather than using some of his personal fortune to help Abbington settle her debt to the taxman, she and Freeman — who was then worth a reported £10 million — decided, instead, to let her be declared bankrupt.
Significantly, all of the couple’s major assets, including their £ 1.4 million house in leafy Potter’s Bar, Hertfordshire, were at the time solely in his name. That meant the decision was, in financial terms, a very shrewd one, since under UK law a partner or spouse’s property is exempt from insolvency proceedings.
To a layman, however, it appeared distinctly iffy. The celebrity couple, with their gilded lifestyle, were using a legal loophole to deprive the public purse of a six-figure sum.
‘Martin has considerable assets, and we can assume that he could have paid off all her debts instantly,’ is how Simon Wagman, a bankruptcy expert with Blick Rothenberg LLP, puts it.
‘However, under the law, he did not have a legal obligation to do so. It was purely a moral decision.’
Funnily enough, Freeman and Abbington only decided to pay the debt five months later, in May 2013, when details of the hitherto- secret bankruptcy were revealed by a scandalised Press.
Suddenly, declaring that they’d made a ‘ big mistake’, the couple publicly pledged to repay the debt to the taxman after all.
In a mea culpa interview with the Radio Times, Abbington explained that she’d run into the financial trouble by earning a lot of money one year, but not the next, and then failing to put any aside to cover tax.
She did not say why Freeman hadn’t simply chosen to settle the unpaid bill on her behalf long before the matter ended up in court.
She also failed to shed light on how she’d misplaced such a vast amount of cash (to generate a £120,000 HMRC bill requires income of around £250,000) in so short a period.
And this is by no means the only skeleton that hangs in Martin Freeman’s designer closet. Take the matter of his former political allegiances.
Freeman isn’t exactly a lifelong Labour supporter. He voted for Arthur Scargill’s far-left Socialist Labour Party (SLP) in 2001, and in interviews prior to the 2005 election claimed that he wouldn’t vote Labour because Tony Blair was too Right-wing.
His support for the SLP — which is now almost defunct but campaigned for the abolition of capitalism and the nationalisation of almost every industry — was undoubtedly heart-felt.
The youngest of five children, he took up acting as a teenager and has often spoken of being moulded by his arty, Roman Catholic upbringing in a 1970s Home Counties household, variously described as ‘bohemian’ and ‘Left-wing’.
With this in mind, his transfer of allegiance from Scargill to Miliband has been gleefully seized on by Tories as evidence that the Labour Leader (once dubbed a ‘quasi-Marxist’ by the New Statesman magazine) has dragged his party hard to the Left.
Meanwhile, the sincerity of Freeman’s socialist views was put into question by the revelation that he chooses to educate his children not at one of the many highly regarded local state schools, but at the town’s loftiest private institutions. His son, born in 2006, attends a single-sex prep school which feeds the prestigious Harrow and costs £12,669 per year. His daughter, born in 2008, is at an exclusive girls’ school where fees are £11,790 per year.
How Freeman squares this with his past support for Socialist Labour is anyone’s guess, since Scargill’s party would deny parents the right to choose to educate their children privately.
The SLP manifesto says: ‘All privatised education services and their assets must be returned to local public control. Proper administration of nurseries, schools, colleges or universities is utterly incompatible with privatisation in any form, including competitive tendering.’
Then there’s the issue of healthcare. Freeman has said: ‘Do I use the private sector? Yes. I do, because I can.’
Not only does this rub up awkwardly against SLP policy of ‘abolishing private healthcare’, it also seems at odds with a claim by ed Miliband not to know ‘anyone’ who goes private.
Taken on their own, such contradictions may seem relatively minor. Together, though, they seem to chime with the view that many well-heeled Labour supporters are hypocrites.
In other words, here is a man who, in the tradition of champagne socialism, would prefer other people to do as he says rather than as he does.
Let us consider, in that light, the pertinent matter of Martin Freeman’s tax affairs.
Back in 2008, just as his Hollywood career was taking off, the actor (who first achieved fame in the UK with The Office, alongside Ricky Gervais) decided to set up a company called Geoffrey Joseph Limited.
The firm (seemingly named after his father Geoffrey, a former serviceman with the Navy) has been trading ever since. Freeman is its only director and shareholder.
Intriguingly, it was incorporated by an accountancy firm called Hogbens Dunphy, which claims to have expertise in helping wealthy entertainment figures deal with ‘income tax, capital gains tax, trusts and estates, and nondomiciliary tax issues’.
On its website, Hogbens Dunphy advertises for clients by claiming: ‘every pound of income tax you save means more income at your disposal. every well planned disposal of assets means minimal loss of capital gains, and every inheritance tax saving means more benefit for your beneficiaries.
‘Make sure you take full advantage of the tax-saving opportunities open to you … Nothing is more demoralising than the thought that a substantial slice of the wealth you have worked so
Freeman is one of the ‘privileged few’ he condemns The accountants he uses boast of tax-saving tricks
Abbington says she’s paid back what she owed
hard to accumulate will end up in the Government’s coffers!’
So Hogbens Dunphy appears to have helped Freeman establish Geoffrey Joseph Limited as a vehicle through which he channels earnings for the apparent purpose, among other things, of tax avoidance.
This is relatively common in the world of tax planning planning, since company profits are liable for corporation tax at a rate that will shortly become 20 per cent, whereas normal income of over £150,000 per year is taxed at 45 per cent.
The system allows actors, whose earnings can vary from one year to the next, to stagger the amount of cash they are paid, in order to make full use of their yearly tax-free and lower-rate income tax allowances.
All of which is perfectly legal, of course. But it also sits awkwardly with the ethos of Mr Freeman’s beloved Labour Party, which has aggressively criticised very similar sorts of tax-planning by wealthy people.
Not long ago, Ed Miliband declared ‘tax avoidance is a terrible thing’ and part of a ‘culture of irresponsibility’.
How does Martin Freeman square this Labour policy with his tax affairs? And how does he reconcile it with his use of an accounting firm that touts for business by saying that ‘nothing is more demoralising’ than paying tax? His spokesman refused to comment when I asked.
Neither is it possible to establish exactly how much cash is flowing through Geoffrey Joseph’s bank accounts, where it is going, and how much is paid in tax.
As a small company, it is required to file only abbreviated accounts. These revealed that in April last year it had £422,329 in assets — up from £392,385 the previous year. But they do not reveal finer details. Tory backbencher Nigel Adams accepts that Freeman’s actions seem perfectly legal, and concedes it’s not unusual for wealthy people to employ accountants to try to minimise their taxes.
But he says: ‘It stinks of hypocrisy to go on TV talking about “fairness”, having done some fancy footwork with his own tax affairs. Hypocrisy is at the heart of Labour campaigning and this election. It’s, “Do as I say, not as I do”.’
Neither is Mr Freeman the only member of his household to have patronised Hogbens Dunphy. His partner Ms Abbington (whom he met on the set of the TV show Men Only) is also a client, using it to administer a second, very similar, company, called Mavis Clementine. This has always counted Abbing- ton, whose real name is Amanda Smith, as its sole director and shareholder. Apart, that is, from one curious 20-month period which began on April 30, 2012.
On that day day, Ms Abbington resigned as a director of Mavis Clementine in favour of friend and fellow actress Sue Vincent (best known for bit-parts in the TV series Shameless and Coronation Street).
Vincent was appointed as Mavis Clementine’s only director, and Amanda Abbington transferred all the company’s shares to her.
Eight months later, Ms Abbington was declared bankrupt over the £120,000 tax bill.
Like all bankruptcies, it was discharged after 12 months, on December 5, 2013. A week later, Vincent resigned as a director of Mavis Clementine and transferred shares in the company back to Abbington. This curious piece of financial gymnastics baffles experts. ‘At the time Abbington resigned from the firm, she obviously knew that she was about to go bankrupt and perhaps wanted to protect the company from being brought into that,’ says Louise Brittain, an insolvency practitioner with Wilkins Kennedy.
‘But as an undischarged bankrupt, she would only have had to resign as a director of the company, not as a shareholder. So the question is: why did she also do that?’
It also seems odd that Abbington chose to transfer control of the firm to Sue Vincent rather than Martin Freeman (the couple have described their relationship as ‘husband and wife’ but have said they won’t get married because ‘we don’t want to spoil it’).
What lay behind this move? Again, a representative refused to comment. Meanwhile, Vincent — who Abbington has described as ‘one of what I call my “dead body friends”: women I’d call if I’d killed someone and didn’t know how to dispose of the victim’ — also declined to comment.
One possible explanation is that Ms Abbington was seeking to find a legal way to prevent the bankruptcy court (and, by extension,extens the taxman) from getting it its hands on any money in MavisMav Clementine’s bank accounts.
Mavis Clementine’sClement value at the time Abbington went bankrupt is, however, uncl unclear. The firm’s accounts record assets of £24,435 but liabilities ofo £23,625 in April 2013, and assetsasset of £68,000 and liabilities of £34,717£34 in April 2014.
Whatever the truth, Abbington claims now to have paid back HMRC the moneymo she owed.
However, her version of events with regard to the finer details of how she s settled this debt appears to haveha changed over time. In May 2013, she told the Radio Times t that it was ‘important for her tot fix the problem on her own andan not rely on her movie-star partner’.p
But last January,Ja she gave a different intervieweri the impression thatth ‘Martin, reputedly on mill millions for playing Bilbo Baggins,Baggin wrote her a cheque’. A spokesmanspok would not comment on whichw of these two conflicting yarnsyarn is correct.
Meanwhile, courtc papers published by the London Gazette reveal that AbbingtonAb entered into an IndividualIndiv Voluntary Arrangement (IVA)(IV with creditors in November 2013, which wasn’t discharged until Fe February this year (long after she pub publicly claimed that the HMRC debt wasw paid off).
Such arrangementsarrangeme are traditionally used as devicesdevic for individuals to clear debts b by paying off a percentage of money owed, rather than the whole amount.
Is this what happened with regard to that £120,000 tax bill? Or did the IVA apply to different, hitherto unreported, debts? Once again, a spokesman would not comment.
Sadly, this deafening silence seems entirely in keeping with the opaque world of Labour’s new celebrity couple, who, when it comes to the values of ‘community, compassion, decency’ that they publicly espouse, appear to expect voters to do as they say, rather than as they do.