Having been put on the back foot over his own tax affairs, Ken Livingstone has now challenged Boris Johnson over income from a TV production company. After the issue was raised in an LBC radio debate this morning, media sources claim a “red with rage” Boris confronted Ken “nose to nose” in a lift, ranting:

“You’re a f**king liar! You’re a f**king liar! You’re a f**king liar!”

Ken’s team are now briefing three questions that Boris Johnson should answer:

1: Did he pay income tax on all of his earnings from Finland Station? Can he categorically say that he didn’t receive any income through dividends and instead pay capital gains tax of 18% (rather than paying income tax at 40%)

2: When he sold his shareholdings in Finland Station to David Jeffcock and Barnaby Spurrier – did he pay income tax on the money that he received at 40%, or capital gains tax at 18%?

3: Did he employ anyone?

It’s all getting rather heated as the home straight looms.

  1. Arieh Kovler says:

    confused. Was Finland Station a holding company for Boris’ personal media appearances? Or was it a straight-up TV production company that Boris was a shareholder of?

    Because if it’s the first one then it’s the same form of dodgy tax avoidance that Ken’s been defending for the last 2 months.

    and if it’s the second then any income Boris receives would be a legit capital gain as a shareholder of a going concern, right?

    Is the Ken campaign saying that ALL investment income is tax avoidance? cos it sort of seems like at worst, they’re accusing Boris of running the same scam as Ken and at best they’re accusing him of owning shares.

  2. Arieh Kovler says:

    OK – according to Boris’ accountant, the answers to your questions are:

    1. Yes he did.
    2. No because he didn’t sell it and the company only had £300 of assets in it anyway.

    So what’s the big deal? Seems like a lot of mud-slinging to avoid admitting that the tax-avoidance crusader is avoiding tax while the Tory is paying it…

  3. In response to Arieh, I’d like to confirm not just earnings, ANY money received from Boris from the company, this was all paid as income and taxed as such?

    Secondly, from watching the video, neither comes out well, Ken seems a bit smarmier, however on two points, this hardly counts as tax avoidance, it’s not like it’s offshore, anyone who has a company could therefore be accused of this. Why not do away with paper money, open up everyone’s bank accounts, corporate or otherwise for the revenue to see and just automatically tax a small percentage above say 25,000, and get rid of the whole issue? Sound like an invasion of privacy? More than the government wanting all our emails and internet logs?

  4. Ken really needs to speak to his accountant if they are the questions he is asking.

    You don’t pay capital gains tax on dividends, you pay normal income tax less the dividend tax credit which reflects the corporation tax, which is paid prior to the dividends being paid, meaning the tax paid is the same as would be paid either way. The only difference is that no National Insurance payments are made on a dividend, which is 2% for higher rate tax payers.

    Capital gains tax is only applicable when shares are sold.

    The advantage of taking money through a company is that you can hold it in cash and pay it out at a later date to reduce tax obligations being paid all in one go, like Ken and Gordon Brown have done with their companies that both hold a lot of cash.

    These are therefore very weird questions to ask and can probably all be answered quite truthfully in the negative.

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