Ex-mayor defends his small business

Former London mayor, Ken Livingstone has defended the use of a limited company to manage his earnings and blamed criticism of it on a 'smear campaign' against him.

The case of Ed Lester, Chairman of the Student Loans Company, who channelled his earnings through a limited company allegedly to avoid tax, caused a flurry of reporting about other high earning Government workers and celebrities who used the so-called 'tax loophole company'.

This led to freelancer groups trying to defend the position of 'genuine freelancers', including the PCG who took to a national advertising campaign to plead not to 'demonise' its workers.

Loads of money

Ex-mayor and media pundit, Ken Livingstone, was also shown to operate through a limited company for some of his work. The national press speculated this was for tax avoidance reasons and in order to 'pay corporation tax rather than income tax'.

Mr Livingstone defended his position on the BBC's Sunday political programme, the Andrew Marr Show. He said: "I am in exactly the same position as everybody else who has a small business. I mean, I get loads of money, all from different sources, and I give it to an accountant and they manage it.

"You pay corporation tax. If you then take out spending yourself, you have to pay more. What I am not doing is paying income tax on the money I use to employ other people.

"The simple fact is, and the hypocrisy of all this, is Boris Johnson [who Livingstone lost the 2008 London Mayoral election to] has exactly the same arrangements to handle his earnings from television. Almost everybody in the media, who is not employed directly, has exactly the same arrangements.

"I am not offshore. I am running a small company, just like hundreds of thousands of people. It's a smear campaign currently being run."