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Ken in line for £30,000 tax-free bonus
Robert Lea, City Correspondent13 Mar 2008
Ken Livingstone's £ 69,000 golden parachute should he lose the Mayoral elections has been boosted by the Chancellor who has decided that nearly half of it will be tax-free.
The Greater London Authority recently rubber-stamped a "resettlement" package of a 50 per cent pay-off should Londoners sack Mr Livingstone on 1 May.
Now the Treasury has enhanced the pay-off calculated on the Mayor's near-138,000 package by ruling that the first £30,000 of his pay-off will be tax-exempt.
The improved terms were immediately attacked by rival Brian Paddick. "It's nice to see Labour looking after its own," said the Liberal Democrat candidate.
Pay-offs for elected representatives are a little-known perk and the Mayor's redundancy package is significantly more generous than those for MPs and ministers.
While MPs on £63,000 a year are entitled to negotiable "resettlement allowances", ministers get three months pay. Thus a £135,000-a-year minister would get around £35,000 when voted out.
Most of that would be tax-free because Revenue & Customs rules dictate that the first £30,000 of a redundancy payment should be tax-exempt. But hidden away in the Revenue & Customs notes after yesterday's Budget is a ruling that the Mayor and the GLA will be brought under the same regime for the first time.
The note said: "Legislation will be introduced in Finance Bill 2008 to ensure that payments under the new GLA severance pay scheme will be tax-exempt up to the first £30,000 thereby bringing their tax treatment into line with that of payments under similar schemes for Westminster MPs and members of the devolved administrations."
Tax experts said the ruling sorted out an obvious anomaly. "Depending on your viewpoint it could be the best use of £30,000 of taxpayers' money this year," said a leading tax adviser.
Reader views (9)
This is no different to the tax treatment of anybody, including failed senior executives, gets when they part company with their employers and receive redundancy and other payments. This is part of increasingly desperate anti-Ken spin. Report the facts.
- Steve, London, 14/03/2008 14:59
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No amount of money is too large to get rid of Ken.
- Nobby Clark, Perth, the Scottish one, 14/03/2008 11:39
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A travesty, but money well spent to be rid of him.
- R M, London, UK, 14/03/2008 11:23
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We must vote on may the 1st and start to remove the people at the top. Let's start with Ken then Brown and then Ian Blair - otherwise we are all doomed. People power!
- Diana Benjamin, London, UK, 14/03/2008 06:34
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How typical of a rampant socialist like Livingstone to expect what no other worker would ever have the effrontery even to ask for, let alone expect. Ken, you are a greedy hypocrite.
- Lezl, London W14 /UK, 14/03/2008 03:58
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Except that the first 30k of anyone's redundancy package is tax free...
- Eb, London, 13/03/2008 17:09
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I'll chip in a tenner if he'll go today! What a joke. He's not being made redundant, he's being fired. There's definitely no need to keep Ken quite after he goes, I'd like him to answer a few questions about his time at town hall.
- Mark, London, 13/03/2008 15:21
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I'd gladly pay 40% of £30k to be rid of him...Very cheap.
- Ces, London, 13/03/2008 15:13
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Forget a "golden parachute" perhaps a "jail cell" might be more appropriate?
- Fraser, Telford Park, UK, 13/03/2008 14:42
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