Mayoral Tax Furore Drags On

In the latest development of the London mayoral candidate tax row, all four candidates have agreed to publish all their earnings and taxes paid in the last four years.

Lest we forget, it all started when Andrew Gilligan of the Telegraph, a journalist not known for his warm feelings towards the former mayor, published an exposé denouncing Ken Livingstone for what he described as tax avoidance. Tory blogger Paul Staines as Guido Fawkes picked up the baton and published frequent criticism of Livingstone, culminating in a chicken-based video stunt (presumably an allusion to Boris Johnson’s now-notorious description of his Telegraph column salary as ‘chicken feed’) at a mayoral campaign event, though a video posted by London political blogger Adam Bienkov which shows Staines knocking over (see comments) bumping into and eliciting sharp comments from a camerawoman and calling a Labour staffer a cunt rather diminishes it.

Ken Livingstone has repeatedly denied avoiding tax and, for a short while, it looked as though it might all blow over, with only the occasional dig from his fellow candidates. Fast forward to Tuesday where Livingstone and Johnson clashed over the issue on air during an LBC radio debate when Livingstone said that Johnson had the same tax arrangements with his own company, Finland Station, which Johnson hotly disputed. Johnson allegedly faced his rival down in a lift afterwards and repeatedly called him ‘a fucking liar’.

The bone of contention is that Livingstone apparently had his earnings paid into his company, Silveta Ltd, meaning he paid corporation tax at 20% rather than income tax at 50%, though he says he paid income tax on the money he takes as salary. Liberal blogger Tim Fenton called Gilligan’s story ‘a disgrace’ and went on to explain that Livingstone’s tax arrangements are commonplace and perfectly legal. The legalities of it aren’t necessarily under debate, but the unfortunate aspect of this saga is that Livingstone has previously been vocal in criticising people for tax avoidance, which has led to accusations of hypocrisy on the part of the former mayor.

The suggestion that all candidates should publish their tax details came from Jenny Jones, and the Guardian notes that until now, Johnson has been reluctant to disclose his financial affairs. Today, Ken Livingstone stated that he will only publish if the other candidates make the same disclosure:

“I will lodge the details for the last four years with an independent body or individual, to be published simultaneously when all four main candidates have provided them. I will set out income to my company over the last four years, how much my wife and I received and how much tax was paid. Full household income and tax must be released by all candidates because the question of the overall household income and tax has continuously been the subject. This fully meets the terms agreed on Newsnight.”

Both Johnson and Paddick have now followed Livingstone’s example and published their tax arrangements while Jenny Jones’ are expected early next week.

Livingstone has also called for an end to the increasingly bad-tempered and negative campaigning on both sides.

Any accountants reading? Can you shed any further light on the mayoral tax debate?

Photo by Matt from London in the Londonist Flickr pool

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  • Wibble

    Sorry but Ken was the *last* to publish his tax details. He dragged his feet & certainly did not set any example. 

  • http://londonist.com/ Dean Nicholas

    Back in reality… does anybody not trying to score a political point for their man (or woman) really give a rat’s posterior about the candidates’ tax arrangements?

    • http://twitter.com/sparticus Mark Walley

      I care about hypocrisy. If Livingstone is going to call out people for avoiding tax by being paid through companies (which he seems to have said) and then is doing exactly the same thing himself (which is what’s being stated, but as far as I’m aware hasn’t been proved yet), then the man is a massive hypocrite on a issue that’s fairly central in current politics. I don’t think anyone of these candidates is going to be perfect, but I don’t want to have a man in power who is a hypocrite on that level.

      • Flamingbagel

        It’s not hypocritical to run a company that employs people other than yourself which is exactly what Ken and Boris did. It is misleading and mischievous to constantly use the pejorative “service company” to describe it. When I ran my own business I was an employee of it, I paid my income tax on what salary I took, just like Ken and Boris, and I paid corporation tax on the profits, just like Ken and Boris. This is a non- story.

        • http://twitter.com/sparticus Mark Walley

          That’s fine, I’ve got no problem with either of them having companies, that makes total sense. I have a problem with people setting up companies just to avoid paying personal tax (which is what Ken has said Boris is doing and what he’s denounced as immoral and wrong). The problem I have then with Ken, is if he’s doing the very same thing he’s said is immoral and wrong that makes him a hypocrite.

  • http://twitter.com/TaxChicKen Chic-Ken

    There is no video of us knocking over the woman, so I suggest you amend that.

    She actually says she was on the floor adjusting her equipment and that we could have knocked her over. We didn’t though. The chicken was a reference to Chic-Ken and Boris Johns-Hen, the Labour chicken suit rival to Chic-Ken.

  • Internet Pawn

    Ken Livingstone still hasn’t published any information on the profits retained in his service company, which was precisely the tax dodge that he had been accused of.  Boris Johnson and Brian Paddick have both confirmed that none of their income is sitting within companies, whereas Livingstone’s disclosures so far show that his arrangements definitely avoid national insurance contributions and may also defer or avoid income tax.