Livingstone, London’s first mayor between 2000 and 2008, has campaigned vocally against tax avoidance by the wealthy, but the Taxpayers Alliance has asked the Revenue to look into his affairs.
Calls for an investigation came after the Sunday Telegraph revealed that Livingstone has been channelling his earnings through a personal company, Silveta Ltd, in order to pay corporation tax at around 21% instead of income tax at up to 50%.
This way Livingstone, who will run against Boris Johnson for the mayoralty in May, has avoided around £50,000 in tax, sources told the paper.
Livingstone also declared a non-cash donation to the Labour party of his staff’s time worth around £77,000, via Silveta, for the year 2011.
Campaigners are calling on HMRC to investigate whether Livingstone has claimed this as a deductible expense, as it would have saved him around £15,400 in corporation tax.
However, Richard Murphy, founder of the Tax Justice Network, said the use of staff time as a tax deductible company expense is in breach of HMRC rules.
Additionally, Silveta’s official purpose is to manage Livingstone’s income from broadcasting, his autobiography and after-dinner speaking, and has no involvement in politics.
HMRC rules state that only expenses incurred exclusively for a company’s commercial purposes may be claimed against tax.
A HMRC spokesperson said the Revenue cannot comment on individual cases.