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Red ken looks blue

It has been revealed that former Mayor of London Ken Livingstone has used a tax avoidance structure to cut his tax bill.

The Sunday Telegraph reported that Livingstone set up a company entitled Silveta into which earnings of £232,000 were paid in 2009. A key advantage of this structure is that it enables the owners of the company to avoid paying a higher rate of income tax on their earnings, which can instead be paid in the form of a dividend. Earnings are also free from National Insurance contributions.

The row over the use of such schemes is likely to intensify as a result of Livingstone's prominent role as a critic of corporate tax avoidance. It was recently reported that former BBC newsreader and face of the HMRC Moira Stuart had also used this method to avoid taxes on her earnings.

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