Ken Livingstone And Boris Johnson's Tax Affairs - What Do We Now Know?

Posted: 5/04/2012 18:21 Updated: 6/04/2012 10:29

Thursday saw some interesting twists in the London Mayoral election campaign, with the three main candidates publishing details of their tax affairs. They agreed to do this after a Newsnight debate on Wednesday evening, when Boris Johnson, Ken Livingstone, Brian Paddick and Jenny Jones all said they would disclose what they earned and how much tax they paid.

This in turn followed the explosive row which broke out between Boris and Ken during an LBC Radio debate earlier this week, with Ken accusing Boris of taking income from a TV production company, Finland Station. Boris memorably denied this, and later accused Ken of "f*****g lies" for making the claim in the first place.

On Thursday Boris Johnson and the Lib Dem candidate Brian Paddick published their tax details, in the form of PDF files from their accountants. Ken initially refused to do this, claiming that the only way to achieve "full disclosure" would be for all the candidates to reveal their total household incomes, not just their individual earnings.

This, said Ken, was because the tax avoidance allegations which have been constantly levelled against him also involve his wife, who was paid by the same company as him, Silveta Limited. She was apparently paid to type up Ken's memoirs, and like him would have been paid at the corporation tax rate of 20%, rather than the higher rate of income tax.

Ken was accused of stalling, and only after pressure from the other candidates and the media issued a PDF of his own - not from his accountants, although Ken's team claimed that's where the figures came from.

So with all three disclosures, what do we now know that we didn't before?

With Boris we've discovered that he earned £1.3m over three years, all of which was paid to him either directly as a salary - for doing his job as Mayor of London - or from freelance payments. These come from his work for the Daily Telegraph where he continues to be a columnist.

Critics of Boris claimed this high income explained why he lobbied for the 50p top rate of tax to be reduced - something George Osborne ended up doing in the Budget last month. The New Statesman points out that if Boris' earnings continued on their present level (assuming he's re-elected next month, of course!) - he would gain from the tax rate reduction by around £16,000 a year.

But the numbers back up Boris' claims - he has paid around 45% tax on his earnings, and none of them appear to have been paid by any company. Boris appears to be paying slightly less tax than might be expected, but he could have allowable deductions, like professional subscriptions, which would explain the discrepancy.

Brian Paddick finds himself in a similar position. His income has dropped markedly since 2008, when he earned around £130,000 in "other income" - presumably sales and advances on his own memoirs, "Line of Fire", which were published in the same year.

Since then he has relied increasingly on his police pension of just over £63,000 - he is taxed on that at 20% for the first £40,000 or so, and then at 40% thereafter. He had 'other earnings' of just over £13,000 - the details of what these earnings where are not given, but they could be subjected to different tax arrangements, depending on what they were.

According to Paddick's own website, the total tax paid as a proportion of his taxable income in 2010/2011 was about 29%.

It's when you turn to Ken Livingstone's tax affairs that things become less transparent, because Ken has been paid by a company - he makes no secret about that.

He says that the numbers he's published today came from his accountants, although unlike Johnson and Paddick there is no letterhead to corroborate this. That would be a cosmetic detail, were it not for problems with how the figures have been drawn up.

Clearly rushing to quell claims that he was stalling, Ken claims that he paid just under £35,000 in tax last year on a total income of £94,500 - an effective rate of 36%.

But there are some strange anomalies in the records - firstly in Ken's claim that he paid £11,000 in "corporation tax on dividends" - however dividends don't attract corporation tax, they attract income tax. This might be an honest mistake, but it is not one that any tax accountant worth their salt would be expected to make.

What complicates Ken's claim is that he does not say in those figures how much he has earned and left in his company, it only says what he has taken out the company. Companies House records for Silveta Ltd suggest that there's still a lot of money from Ken's income - paid into the company, not directly to him - which has not been paid out. This is going on the most recent figures available up until June 2010, when the company had assets of around £284,000.

This confusion has led to the claim that Ken's actual tax rate is actually only about 14%. Labour are trying to deny this and have issued a briefing document to be used by their staff.

What seems to be most damaging for Ken, though, is that he has reluctantly rushed out a set of figures which have only thrown up more questions than answers.

He hasn't broken any laws, but he's managed to switch the whole debate in this election away from policy and towards the financial dealings of the candidates.

Behind in the polls, and now tipped by the bookies to lose the Mayoral election, the Labour candidate appears to have come out of a week-long row - which he himself ignited - the loser.

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Thursday saw some interesting twists in the London Mayoral election campaign, with the three main candidates publishing details of their tax affairs. They agreed to do this after a Newsnight debate on...
Thursday saw some interesting twists in the London Mayoral election campaign, with the three main candidates publishing details of their tax affairs. They agreed to do this after a Newsnight debate on...
 
 
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HUFFPOST SUPER USER
DaveJohnWard
03:42 PM on 04/29/2012
As no-one has been accused of doing anything illegal, the problem (assuming there is one) clearly sits with our over complex tax system.
Rather than spending all this energy on chasing perfectly legal tax avoidance, the effort should be directed towards chasing tax evasion and putting forward proposals for a simpler tax system.
Or is that just too boring?
10:44 PM on 04/09/2012
"What do we want ?
Procrastination !
When do we want it ?
Week after next !!"
10:41 PM on 04/09/2012
Think back to the MPs expenses scandal some time ago. Remember they were all going to be squeaky clean and list all their expenses for us to see ? Remember that some of them submitted blank sheets with signatures at the bottom claiming that filling in details would become a security risk ? Total waste of time and money. They will duck and dive and bob and weave like all rich people to cover their darker sides.
Remember the plans to stop failing bankers taking their obscene bonuses ? They simply paid themselves another way, and the Govt did bugger all about it. Rich looking after the rich, nothing changes.
09:20 PM on 04/07/2012
How strange it is that all these political scandals are leading to a better system. From now on all the candidates for office in Britain will have to be prepared to have the media examine their financial records from the off. For the moment my dream is to see Carlos Cortiglia's tax records. It should make interesting reading!
07:40 AM on 04/07/2012
This is a little ridiculous: a bunch of rich men playing show and tell.
02:22 PM on 04/06/2012
ken looks after ken and no one else, his poor wife stuck up the attic for 3 years typing his memoirs, i guess she must be using one finger to type like i do, i was disgusted when he announced to andrew marr that he has money coming in from all directions, therefore he has no idea of how much he earns or how much tax he's paid as it all goes to his accountantant, what a load of bull how can anyone trust someone who can spin lie after lie, those people voting for ken in the belief that he will look after them are very much mistaken, i'll say it again ken looks after no one but ken, what happened to his croonies he had on the books when he was the mayor
lastpost
see biography
01:48 PM on 04/06/2012
"What Do We Now Know?"
Not a lot.

"all said they would disclose what they earned"
Earned: Obtained through merit, effort or action.

"what do we now know that we didn't before?"
That one can fool some of the people some of the time, etcetera...

"there are some strange anomalies"
No! Really.
01:06 PM on 04/06/2012
Boris has'nt got a chance.
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Mickey Mouse 1
There are no lies or deceit on a chess board.
12:58 PM on 04/06/2012
Boris and Ken's tax figures are likely to tell us that they are both paying the legal minimum amount of tax.
03:03 PM on 04/09/2012
Wrong. The figures have showed us that Johnson is paying the maximum amount of tax through PAYE & that Livingstone pays the minimum, by operating through a limited company & utilising his wife to spread the tax liability & maximise allowances. You haven't actually looked at any of the figures have you?
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Mickey Mouse 1
There are no lies or deceit on a chess board.
09:01 PM on 04/09/2012
OK, so one out of two is not bad! I guess you can start a Boris fan club against the nasty, minimum tax paying Ken Livingstone.
HUFFPOST SUPER USER
OD4U
If its OK for one then its OK for all.
11:12 AM on 04/06/2012
Do any honest people reach top positions?
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Mickey Mouse 1
There are no lies or deceit on a chess board.
12:59 PM on 04/06/2012
Not in government!
11:07 AM on 04/06/2012
This just goes to prove that Red Ken cannot possibly be trusted as Mayor of London!

Any politician who has allegiance to a RED WARNING banner also used by Communists, Marxists, Trotskyites and similar miscreants CANNOT BE TRUSTED!

Boris is the only candidate out of all of the contenders who can be trusted AND WILL MOST DEFINITELY GET MY VOTE
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Mickey Mouse 1
There are no lies or deceit on a chess board.
10:08 AM on 04/06/2012
Politics is all about hypocrisy and paying less tax than the ordinary guy in the street. There was a big outcry when the government paid a Quango hotshot through his company so he could legally avoid paying too much tax. The government said they would put an end to the practice, but they forgot to tell the politicians like Boris and Ken.
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HUFFPOST SUPER USER
ccraiglamont
Sometimes funny, other times...not!
09:32 AM on 04/06/2012
So, to recap... Boris, Brian and tuther lass gave transparent, detailed documentation about their incomes. Ken did not!
Ken is just like all the pseudo socialists that have been anywhere near power in the last 20 years, "In it for themselves!"
You will never vote for Labour ever again! Just a wolf in a red cape that gobbled Grandma, the poor, the hard-working and the decent, law abiding citizens of this country up!
11:06 AM on 04/06/2012
You're right of course. As far as politicians and trade union leaders are concerned, socialism is for everybody else.
10:23 PM on 04/05/2012
Ken is the worst kind of socialist - spouting his principles of wanting to help the people of London when all he really wants is to line is pockets and re-employ his wife and cronies. He couldn't care less about any of us, except to milk us for more money. If he really is so committed ( and personally I think he should be, in a nice llittle padded cell) to the cause of helping London, how about he does what Mayor Bloomberg In New York does - work for nothing. Neither Bloomberg now his daughter ( who works with him) take a salary from the city - I wonder if Ken and his wife would be so keen if there was no money involved?
12:09 AM on 04/06/2012
It's clear this thread is permeated with tory (majority) thinking.
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