Ken Livingstone, Labour’s candidate for the London mayoralty, faces an HM Revenue and Customs investigation after admitting that he has set some of his election expenses against tax, saving thousands of pounds on his personal tax bill.
Mr Livingstone, who has called tax avoiders “rich b******s” who should “not be allowed to vote,” has struggled to fend off charges of hypocrisy after The Sunday Telegraph revealed that he has avoided at least £50,000 in tax by channelling his earnings through a personal company, Silveta Ltd and paying corporation tax at 20 or 21 per cent rather than income tax at up to 50 per cent.
Last week, Mr Livingstone justified the arrangement, saying he used the money he saved to employ a press officer and economic adviser for his election campaign. He told LBC radio’s Nick Ferrari: “[Journalists] are saying that I could have paid £50,000 more tax. I could. Or I could use it, as I have done, to employ two people.” He said the employees were “a good economist who worked out how we can cut fares and a woman to handle my media”. On BBC London’s Vanessa Feltz show, he described their employment as a company expense that had been set against tax. On BBC Radio 5 Live’s Pienaar’s Politics show, he said that he had used company money “to pay for people to work on the campaign for mayor.
In the last quarter of 2011, according to Electoral Commission records, Mr Livingstone declared a “non-cash donation” to Labour of staff time worth £19,202, suggesting a value for the whole year of £77,000. By claiming this as a deductible expense, Mr Livingstone would save at least £15,400 in corporation tax. The income tax and National Insurance saved on such a sum would be up to £37,000 for a higher-rate taxpayer.
Accountants said that Mr Livingstone’s treatment of campaign staff as tax-deductible company expenses broke HMRC rules, which say that only expenses “wholly and exclusively” incurred for the commercial purposes of the company can be claimed.
Richard Murphy, an accountant and campaigner against tax avoidance, said: “If he’s recorded the staff time as a donation to the Labour party, I can’t see how that can be an allowable expense.”
Source: http://www.telegraph.co.uk/news/poli...-tax-bill.html
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Wholly, exclusively and necessarily incurred in the performance of his duties!
What a socialist piece of tulip he is!!!
Having said that I don't Boris also.
Good thing I don't live in London so I don't have to make a choice between two of those...
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