Britain’s highest-earning MP invests in alleged tax avoidance scheme under investigation by HMRC

Britain’s highest-earning MP invests in alleged tax avoidance scheme under investigation by HMRC

Tory MP Geoffrey Cox is one of hundreds of wealthy figures, celebrities and sports stars putting cash into Phoenix Film Partners LLP

Britain’s highest-earning MP has invested in an alleged tax avoidance scheme being investigated by officials.

Tory Geoffrey Cox QC, who earns up to £600-an-hour as a top lawyer, is one of hundreds of wealthy figures and celebrities putting cash into Phoenix Film Partners LLP.

But HM Revenue & Customs has decided the movie investment scheme was designed to avoid tax and is demanding users pay up.

Mr Cox recently earned £329,452 in a year as a barrister, while bagging £67,000 a year for his work as MP for Torridge and West Devon.

He joined Phoenix in 2008, three years after he was elected. It is not known how much he has invested and there is no suggestion he has done anything illegal.

The 54-year-old said: “I am not going to comment on my private tax affairs.”

Accounts for Phoenix show it had assets of £107million last year, but made a £7.7million loss over five years, since launching in 2008.

The 230 members did not have to pay tax on the money they invested but will have to pay it on any future earnings. Last year the average payout to users was £274, up from £94 the year before.

Phoenix is one of 1,200 avoidance schemes recently identified by HMRC where investors are being told to hand over unpaid tax before disputes are settled by a tribunal.

It is among several film-financing projects set up by Ingenious Media, which denies running avoidance set-ups for the super-rich.

Ingenious clients include footballers Wayne Rooney, Steven Gerrard and Joey Barton, plus film-maker Guy Ritchie and TV stars Jeremy Paxman, Anne Robinson and Hugh Fearnley-Whittingstall.

Hugh, 49, recently praised Scandinavian countries where citizens were “happy” to pay 50% or more in tax.

He said they had a “social cohesion we lack”.

Hugh joined in 2008 but quit six months ago.

Today, he said he thought it was a “bona fide investment” with “government-approved tax relief”.

But he added: “It seems from reports HMRC does have reservations. I want to be transparent, so this year I resigned my subscription and handed back all the tax gain I made, plus interest, to HMRC.”

Ingenious, run by venture capitalist Patrick McKenna, is getting ready for a showdown with HMRC later this year after taking three other disputed film investment schemes to a tax tribunal.

It refused to comment but has said previously: “The film partnerships have already generated over £1billion in taxable income for the treasury, with more to come over the lifetime of the films they funded.”

It said HMRC confirmed the partnerships were set up “in accordance with Government policy” but added the Government had changed its position “driven by a crude attempt to generate cash for the Exchequer in an unfair and unjust manner”.

The statement went on: “HMRC have failed to distinguish between commercial businesses and tax avoidance schemes and have deemed all film arrangements to be tax schemes.”