Ken Livingstone and Boris Johnson clash furiously on a radio show about their tax arrangements, after which Mr Johnson tells Mr Livingstone that accusations levelled at him are “all f****** lies”.
In a heated debate hosted by LBC 97.3, Conservative Mr Johnson denied suggestions he had used a company to channel his media earnings to avoid paying income tax – a claim that he has levelled at his Labour opponent.
Mr Livingstone accused the mayor of having “the same arrangements” for dealing with his media earnings as he had, insisting he had used a company called Finland Station.
Mr Johnson called the claim “lies”, adding: “I have never used a company to minimise my tax.
“There was a TV production company which I was briefly a director of but I certainly never… I have always paid full income tax.”
The row continued off-air when Mr Johnson swore at his Labour opponent.
Travelling up to the roof terrace to be photographed, the Mayor said to Mr Livingstone: “It’s all f****** lies, it’s all f****** lies”.
Channel 4 News understands the mayor had talked to his opponent privately weeks ago to tell him what he had been saying about his tax arrangements was not true.
Mr Livingstone has come under attack in recent weeks over claims that he was paid via a company so he was liable only for corporation tax at 20 per cent.
Mr Johnson was said to be “very frustrated” that the Labour candidate attempted to claim during today’s public debate that he adopted the same practice despite having previously been told it was not true.
Mr Johnson issued a statement rebutting the allegations over his tax affairs.
He said: “In relation to my business affairs and tax arrangements, specifically do I have any company or other arrangements constructed to enable me to pay less tax and do I, as has been claimed by the Labour mayoral candidate and the opposition leader, have the same arrangements as Labour’s mayoral candidate?
“The answer is simple and unequivocal in both cases. No.
“My salary as mayor is taxed as an employee of the GLA. In the same way as when I was an MP my salary was taxed as an employee.
“Any other income that I have received from outside endeavours has been received on a self-employed basis, to me as an individual (no company or other structure has been involved).
“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.”
A spokesman for Ken Livingstone said: “Boris Johnson lost his temper because he lost the debate – he talked about cable cars, not cutting fares and the squeeze on Londoners.”
A spokesman added later: “After the 2008 election Ken’s work was based on a range of private sector sources, including speaking, broadcasting and other media. The best way to organise this was through a company, Silveta, supporting the work of the business including paying for the work of others to make this viable.
“Thousands of others with small businesses do the same. In later years the company has paid for the work of other people to provide with research and assistance and of course has overheads. As has been widely reported, Emma Beal has also worked for the company. The company will be closed if Ken is elected.”
The declared candidates for the London mayoral elections are:
Boris Johnson (C)
Ken Livingstone (Lab)
Brian Paddick (LD)
Jenny Jones (Green)
Carlos Cortiglia (BNP)
Siobhan Benita (Ind)
Lawrence Webb (UKIP)