Follow up letter to HMRC re. Ken Livingstone

March 28, 2012 7:23 PM

I have written a follow up letter to HRMC today, following the re-classification of donations made to Ken Livingstone's campaign in light of the questions relating to his tax affairs. The letter is reproduced below, and you can read my original letter to HMRC here. The letter from the Electoral Commission to Greg Hands MP (which prompted my second letter) is here (pdf).

Dear Sir/Madam,

I write further to my letter of Saturday 17 March 2012 (attached) in which I sought an urgent investigation into the tax arrangements of Mr Ken Livingstone with respect to his company Silveta Ltd, through which he has been channelling his earnings and seemingly paying those involved in his election campaign for the London Mayoralty.

I reiterate my belief that the employment of an economist to come up with policies and of “people handling the media” for Mr Livingstone’s campaign cannot be defined as expenses incurred “wholly and exclusively” for the purposes of Silveta’s trade, as HMRC rules state they should be.

However, the matter has become all the more pressing since my attention has today been drawn to a letter (also attached) from Lisa Klein, Director of Party and Election Finance at the Electoral Commission, to Greg Hands MP, dated 23 March 2012.

Regarding the donation-in-kind from Mr Ken Livingstone of “staff costs” to the value of £19,202 (Electoral Commission Ref. No. NC0077078) and accepted by the Labour Party in December 2011, Ms Klein states:

“As a result of our discussions, the party have now requested a change to the register to show that the donation was actually from Silveta Ltd.”

There therefore now appears to be prima facie evidence that Mr Livingstone was channelling untaxed income paid to Silveta Ltd directly to the Labour Party as a political donation-in-kind, which I understand to be a stark breach of HMRC rules.

I trust that you will investigate this matter with the greatest seriousness and urgency, not least because with the election only five weeks away, it would only seem right and proper that voters should have the full facts before them when they cast their ballots on Thursday 3 May.I have written a follow up letter to HRMC today, following the re-classification of donations made to Ken Livingstone's campaign in light of the questions relating to his tax affairs. The letter is reproduced below, and you can read my original letter to HMRC here. The letter from the Electoral Commission to Greg Hands MP (which prompted my second letter) is here (pdf).

Dear Sir/Madam,

I write further to my letter of Saturday 17 March 2012 (attached) in which I sought an urgent investigation into the tax arrangements of Mr Ken Livingstone with respect to his company Silveta Ltd, through which he has been channelling his earnings and seemingly paying those involved in his election campaign for the London Mayoralty.

I reiterate my belief that the employment of an economist to come up with policies and of “people handling the media” for Mr Livingstone’s campaign cannot be defined as expenses incurred “wholly and exclusively” for the purposes of Silveta’s trade, as HMRC rules state they should be.

However, the matter has become all the more pressing since my attention has today been drawn to a letter (also attached) from Lisa Klein, Director of Party and Election Finance at the Electoral Commission, to Greg Hands MP, dated 23 March 2012.

Regarding the donation-in-kind from Mr Ken Livingstone of “staff costs” to the value of £19,202 (Electoral Commission Ref. No. NC0077078) and accepted by the Labour Party in December 2011, Ms Klein states:

“As a result of our discussions, the party have now requested a change to the register to show that the donation was actually from Silveta Ltd.”

There therefore now appears to be prima facie evidence that Mr Livingstone was channelling untaxed income paid to Silveta Ltd directly to the Labour Party as a political donation-in-kind, which I understand to be a stark breach of HMRC rules.

I trust that you will investigate this matter with the greatest seriousness and urgency, not least because with the election only five weeks away, it would only seem right and proper that voters should have the full facts before them when they cast their ballots on Thursday 3 May.

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