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Boris Johnson and Ken Livingstone in on-air tax row Boris Johnson and Ken Livingstone in on-air tax row
(40 minutes later)
London mayoral rivals Boris Johnson and Ken Livingstone clashed over their tax affairs in an angry on-air row. London mayoral rivals Boris Johnson and Ken Livingstone clashed over their tax affairs in an on-air row.
Mr Livingstone says claims he avoided some tax by being paid via a company were "smears". His rival had used "the same arrangement" when an MP, he said.Mr Livingstone says claims he avoided some tax by being paid via a company were "smears". His rival had used "the same arrangement" when an MP, he said.
In an LBC radio phone-in, Mr Johnson called him "a bare faced liar" adding: "I always paid full income tax." In an LBC radio debate, Mr Johnson called him "a bare faced liar" adding: "I always paid full income tax."
A furious Mr Johnson reportedly swore at his Labour rival as the row continued in a lift after the debate.A furious Mr Johnson reportedly swore at his Labour rival as the row continued in a lift after the debate.
The row began with a question from a caller to the show, who suggested Mr Livingstone had avoided paying his full income tax. The subject was raised with a question from a caller to the show, who suggested Mr Livingstone had avoided paying his full income tax.
It follows weeks of claims he was paid via a company, so he was only liable for corporation tax at 20%. It follows weeks of claims he was paid via a company, Silveta Ltd, so he was only liable for corporation tax at 20%, rather than income tax.
The issue has been raised several times at prime minister's questions by Conservative MPs keen to support Mr Johnson's re-election bid on 3 May. The issue has been raised several times at Prime Minister's Questions by Conservative MPs keen to support Mr Johnson's re-election bid on 3 May.
'Exact same position''Exact same position'
Mr Livingstone said his arrangement was not a "tax avoidance thing" and to suggest otherwise was a "smear", adding: "I pay my income tax on everything I get."Mr Livingstone said his arrangement was not a "tax avoidance thing" and to suggest otherwise was a "smear", adding: "I pay my income tax on everything I get."
But he said he had to pay three members of staff and "you can't do that just on some casual arrangement": "Nobody in Britain employs people and pays income tax on the money they pay them."But he said he had to pay three members of staff and "you can't do that just on some casual arrangement": "Nobody in Britain employs people and pays income tax on the money they pay them."
He said he and Mr Johnson - who have both enjoyed high media profiles as politicians - had been in "the exact same position", as Mr Johnson had a TV production company called Finland Station when he was an MP.He said he and Mr Johnson - who have both enjoyed high media profiles as politicians - had been in "the exact same position", as Mr Johnson had a TV production company called Finland Station when he was an MP.
"We both had media earnings, we both put them through a company. You don't avoid tax on that, you have to pay tax on the money you take out.""We both had media earnings, we both put them through a company. You don't avoid tax on that, you have to pay tax on the money you take out."
Mr Johnson, the incumbent mayor who unseated Labour's Mr Livingstone in 2008, interrupted, saying: "No! That's not true, that's not true... the guy's a bare-faced liar."Mr Johnson, the incumbent mayor who unseated Labour's Mr Livingstone in 2008, interrupted, saying: "No! That's not true, that's not true... the guy's a bare-faced liar."
He said he was "briefly" a director of the company but said it was not right to say he had used it to avoid paying income tax: "I have never used a company to minimise my tax obligations."He said he was "briefly" a director of the company but said it was not right to say he had used it to avoid paying income tax: "I have never used a company to minimise my tax obligations."
"I've always paid full income tax.""I've always paid full income tax."
'Heat not light''Heat not light'
Mr Livingstone claimed Mr Johnson would pay £12,500 less tax because he had "won his campaign" to get the chancellor to cut the top rate of income tax on earnings over £150,000 from 50p to 45p from next April - while pensioners would pay more in tax, due to a freeze on age-related allowances.Mr Livingstone claimed Mr Johnson would pay £12,500 less tax because he had "won his campaign" to get the chancellor to cut the top rate of income tax on earnings over £150,000 from 50p to 45p from next April - while pensioners would pay more in tax, due to a freeze on age-related allowances.
Lib Dem candidate Brian Paddick told Mr Livingstone he could have set himself up as a sole trader on which "you pay tax on everything you earn": "You have chosen a way of avoiding paying high levels of tax, Boris Johnson of course benefits from the fact that the 50p tax rate is reduced to 45p - he personally benefits from that."Lib Dem candidate Brian Paddick told Mr Livingstone he could have set himself up as a sole trader on which "you pay tax on everything you earn": "You have chosen a way of avoiding paying high levels of tax, Boris Johnson of course benefits from the fact that the 50p tax rate is reduced to 45p - he personally benefits from that."
Green Party candidate Jenny Jones added: "Just for the record, I have one salary and I happily pay tax on it - it's a social thing."
Following the radio debate, Mr Johnson is reported to have sworn at his Labour rival in a lift - a source close to the mayor told the BBC the mayor had been justifiably angry because of "nasty, personal and vindictive lies".Following the radio debate, Mr Johnson is reported to have sworn at his Labour rival in a lift - a source close to the mayor told the BBC the mayor had been justifiably angry because of "nasty, personal and vindictive lies".
Later he said any outside income he received, either as an MP or as mayor, "has been received on a self-employed basis, to me as an individual (no company or other structure has been involved)."
"No income earned by me has ever been paid to a 'service' company, through which a person or person's freelance earnings can be channelled so that they pay corporation rather than income tax. 'To suggest otherwise is a complete and utter fabrication."
But a spokesman for Mr Livingstone said: "Boris Johnson lost his temper because he lost the debate - he talked about cable cars, not cutting fares and the squeeze on Londoners."But a spokesman for Mr Livingstone said: "Boris Johnson lost his temper because he lost the debate - he talked about cable cars, not cutting fares and the squeeze on Londoners."
Mr Johnson is understood to have privately explained his tax arrangements to Mr Livingstone three weeks ago and asked him to stop making the claims.Mr Johnson is understood to have privately explained his tax arrangements to Mr Livingstone three weeks ago and asked him to stop making the claims.
Mr Paddick said the debate had contained "a lot of heat but not much light".Mr Paddick said the debate had contained "a lot of heat but not much light".