London mayor calls on candidates to disclose all tax details as Ken Livingstone reveals £125,500 payment in dividends
Boris Johnson earned just short of £900,000 from his freelance work on top of his six-figure mayoral salary in the first three years at City Hall, figures published by the Conservative mayor revealed yesterday, bringing his total earnings for the period to close to £1.3m.
His freelance earnings were £363,000 the year before he became mayor, when he was still an MP with a £55,000 salary. His full earnings over the past four years are just under £1.7m. The scale of Johnson's earnings will fuel claims by his rival Ken Livingstone that the Conservative candidate stands to significantly benefit from chancellor George Osborne's decision to scrap the 50p top rate of tax – a move that Johnson strongly lobbied for.
The release of the earnings data raises the possibility of demands on future MPs to reveal their tax arrangements, and could set a precedent at the next general election for a more open, US-style contest.
The figures were published after Johnson made a public commitment during a mayoral debate on BBC2's Newsnight on Wednesday in an attempt to settle a row with Livingstone over their respective tax arrangements in an increasingly bitter contest ahead of elections next month. Johnson called Livingstone a "fucking liar" in a lift the day before.
But figures eventually released by Livingstone – after an initial refusal to do so – showed that over four years the Labour mayoral candidate paid himself dividends worth £125,555 from Silveta Ltd, the company he owns with his wife, on which he paid just £23,730 in corporation tax – which at 20% is significantly lower than the income tax he would have paid.
The figures, verified by an accountant, show Livingstone took £342,041 over the period from a combined income for employment, "interest", company dividends, and his pension. Total tax paid over the period was £113,861, comprising £90,131 in income tax between 2007-2008 and 2010/2011 and the £23,730 in corporation tax . However, the figures do not show the true scale of his earnings since these were channelled through the company.
Livingstone has been stung by accusations of hypocrisy in denouncing those who avoid tax while setting up a private company to pay tax on his earnings at a lower rate. He insists the company was set up because he employed his wife to type up his 700-page autobiography, and two other members of staff working on his election campaign. He has repeatedly alleged Johnson had similar arrangements.
Livingstone initially refused to publish his details unless certain criteria were met, despite having pressed a seemingly reluctant Johnson to do so. By lunchtime on Friday Liberal Democrat mayoral candidate Brian Paddick had published provisional details of his earnings and tax and promised to publish more as soon as possible.
Jenny Jones, the Green candidate who suggested publishing earnings details would draw a line under the row between Johnson and Livingstone and allow the campaign to focus on policy, was also working to ensure she made good on her promise.
Livingstone's refusal to immediately follow suit prompted Johnson's call to the candidates to "keep their promises". "Last night every candidate gave an unequivocal promise on national TV to release all their earnings, whether through a company or not, and all the income tax they paid on all those earnings," said Johnson.
"I have done that today and I would expect, and am sure Londoners would also expect, all candidates to keep their promises. As I have always said in this election, Londoners should be able to trust their mayor."
By mid-afternoon, the Labour candidate released a summary financial statement, but only relating to the income he had taken out of, rather than channelled into, his company. He maintains that the voting public will only get a true picture if the income and tax arrangements of candidates' partners are also included, reflecting the attention that has been focused upon "my income tax and that of my wife", Emma Beal. He insists publishing household incomes was the only way to make the process "open and fair".
He also said he wanted an individual appointed to ensure the details of the respective candidates were published at the same time.
The latest returns show Johnson, who earns £250,000 for a Daily Telegraph column, received an additional £89,625 in freelance earnings alongside his £133,117 mayoral salary in 2010-2011.
Livingstone insisted after releasing his details that the information made available by both camps did not amount to full disclosure. "We remain committed to full disclosure based on the framework we set out. Many people have called for that, but now it is proposed, they seem less interested. We are ready to meet the other campaigns to discuss full, agreed, disclosure of household incomes to ensure this issue is fully addressed. For too long this matter has distracted coverage of an election that needs to be about how we ensure Londoners are better off. Only our proposal for full disclosure on agreed terms will deliver this and we urge other campaigns to meet us. It's time to put up or shut up."
Paddick, a former senior officer at Scotland Yard, operates as a sole trader. His earnings include an annual police pension of £63,397 and other earnings which vary by year, on which he pays full tax. In 2010/11, he earned an additional £13,355, making £76,804. A spokesman for Paddick said: "Brian Paddick has nothing to hide and is very happy to be open and transparent about his income and tax returns as a registered sole trader. His figures show he has never attempted to use any complex arrangements to dodge paying anything less than full tax on his earnings."