When I spoke to the tax justice campaigner Richard Murphy about Ken Livingstone’s tax avoidance, he said that the practice of individuals pretending that they were companies caused ‘a massive leakage of tax revenue. They have all the tax advantages of a company without the obligation to tell the world what they are doing with the privilege society has granted them.’
You need to think about the secrecy as much as the self-enrichment when considering the behaviour of Livingstone and his kind. For a Chancellor facing a massive national debt the advantages of cracking down on individuals who turn themselves into KenCos are obvious. The Livingstones of the world only pay corporation tax on their earnings rather than the full higher rate of income tax. Even when they take out their money in dividends, their tax bills are still lower than the bills of the dumb saps who pay tax straight.
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