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WATCH: Boris to Ken - "You've Got To Stop Lying"

Tuesday 3rd April 2012

Boris Johnson has called Ken Livingstone a liar live on LBC 97.3 for claiming he has also used a private company to avoid paying income tax.

The Labour mayoral candidate has himself channeled income through a company and therefore paid corporation rather than income tax - but claims that is a perfectly legal arrangement, previously telling LBC 97.3 that his financial arrangements show he has what it takes to be Mayor.

"Who would vote for a Mayor that pays more tax than they have to? They want you to look after London," he explained to Nick Ferrari last month.

However things got heated during the first live broadcast mayoral debate, which took place on LBC 97.3 earlier today.

Mr Livingstone accused Mr Johnson of using the same tax avoidance ploy. "We've both had media earnings, we've both put them through a company," he said. "You don't avoid tax on that, you have to pay tax on the money you take out. If you want to do tax avoidance you do what his employers do."

The sentence was quickly swallowed up by bickering as the other candidates in the studio - which included Boris himself, Liberal Democrat Brian Paddick and the Green Party's Jenny Jones - attempted to respond.

Boris retorted, "I pay income tax, I'm proud of it. I think it's pretty disgraceful to be attacked by Ken Livingstone - someone who's deliberately set up a tax dodging manouver - and then denounced everybody else who did so - which does not include me."

Ken interrupted to say, "you [Boris] had the same arrangements - you had the Finland Station Company..." before being cut off by Mr Johnson, who declared, "that is an absolute lie. You've got to stop lying!"

Brian Paddick interjected to say that he thinks the whole situation reveals hypocrisy by Mr Livingstone.

"The difference between these two guys over here is Ken Livingstone heavily criticised a public servant who funneled his salary into a private company to avoid tax - in the exactly the same way as Ken Livingstone is doing. You can't criticise other people for doing something that you do yourself!"

"Just for the record," Jenny Jones told Nick Ferrari, who was chairing the debate. "I have one salary and I happily pay tax on it"

Following the debate - the live blog for which you can find here - Boris Johnson issued LBC 97.3 with a statement condemning Ken Livingstone's accusations.

In it Boris Johnson denies he has any tax avoiding measures set up and also denies Mr Livingstone's claim that he has used the same arrangement as the Labour mayoral candidate.

"No income earned by me has ever been paid to a 'service' company, through which a person or person's freelance earnings can be channelled so that they pay corporation rather than income tax.

"To suggest otherwise is a complete and utter fabrication.

"Of course the real point is not about my tax arrangements. It is about the hypocrisy of a man who for years has railed against those who use special arrangements to reduce their tax and who has then been caught - bang to rights - doing the very same thing himself."

Shortly after we recieved the statement from Boris' office a response was issued from Ken's office.

"Boris Johnson lost his temper because he lost the debate - he talked about cable cars not cutting fares and the squeeze on Londoners," it read.

Listen again to the Mayoral debate in full.

See the full list of Mayoral candidates.