Thursday, March 15, 2012

More on Ken Livingstone's Income

While looking into the claims being made about Ken Livingstone's tax affairs I was struck by something very strange:
Mr Livingstone has made attacking the rich a major feature of his campaign. In three years, however, he has now channelled total earnings of £755,778 through the company, putting him comfortably in the top 1 per cent of all earners. - Andrew Gilligan
 Livingstone said that he earned £55,000 in the last year and paid the full rate of income tax on that but did not earn enough to pay the top rate of income tax. - The Guardian
Only one of these statements has Ken in the leagues of the mega rich, the other has him earning a decent but by no means excessive amount. I can't help asking myself who's right?

I'm not sure how much Ken's line of work brings in, but to me the lower figure seems more realistic. To get a better idea I took a look over the accounts for Ken's company, Silveta Limited. Looking over the accounts, the history runs a little like this: In 2009, the company retained a significant amount profit, £232,550 of which was retained in the company, in 2010 the retained profits rose to £284,580, in 2011 the retained profits dropped to £238,646 indicating that the company is likely to have made a loss.

At this point I noticed that these three numbers added up to the figure of £755,776, just £2 off Gilligan's figure. The £2 difference could be explained by the fact that figure for shareholders funds in the account is £2 higher and  Gilligan could have read the wrong column. What Gilligan had done was to take the level of retained profits in the company and treat it as the company's trading profits.

What all this means is that the figures that Andrew Gilligan has been putting out on his Telegraph blog about Ken's earnings are complete and utter nonsense.

3 comments:

Jack Star said...

Bet you wished you'd spotted that earlier- before you went to all the bother of defending tax avoidance ;-)

Anonymous said...

Interestingly, Andrew Gilligan used to be a journalist.

Anonymous said...

Andrew Gilligan: Staunch opponent of ID cards.

Good man.