n all the controversy over Boris Johnson’s costly flat refurbishment and his falling out with Dominic Cummings, the most perplexing question is why a Prime Minister paid £157,000 a year should feel the need to ask donors to pay for his wallpaper.
But now senior Conservatives believe they have the answer. Tory grandees are convinced the PM’s pleas of poverty were triggered by a giant income tax demand that landed on his doorstep months after he moved into 10 Downing Street and which swallowed up his entire official salary for two years.
An analysis of the Prime Minister’s published finances reveals this bill could indeed have been colossal. Two leading tax experts estimate it would have added up to £350,000 or even £370,000, the first tranche becoming due in January 2020 which is when Mr Johnson appears to have started his quest for donors to help cover the redecorations of the flat he shares with fiancée Carrie Symonds.
It all stems from a year of prolific — and lucrative — public speaking and writing after his resignation from Theresa May’s Cabinet as foreign secretary on July 9, 2018 to the day he marched triumphantly back in as Prime Minister on July 23, 2019.
In the space of just over 12 months the future PM pulled in £797,262.68 — putting him firmly inside the 45 per cent tax bracket for most of his extra-parliamentary earnings.
Over half of his sudden windfall came from the after-dinner speaking circuit. Boris was flown to New York, New Delhi and Geneva by banks and corporations.
A single speaking engagement in Delhi earned him a fee of £122,899 from media firm India Today which also paid for flights and accommodation. He pocketed £94,507 from GoldenTree Asset Management for flying to the United States. A speech in Dublin earned him another £51,250.
Altogether Mr Johnson made £450,475 from nine paid speaking engagements. The former journalist also cashed in on the demand from people to read his views as speculation mounted that he might succeed Mrs May.
He made £295,790 from columns and articles. His weekly piece for the Telegraph took him 10 hours a month to write and netted £22,916 each month — a rate of £2,291 an hour. All of Mr Johnson’s extra-parliamentary earnings were declared in the register of members’ financial interests. But senior Tories think the sudden bulge in his income left him having to shoulder a big tax demand the following year.
“Boris is famously chaotic with money — it is not hard to imagine him spending the money and then finding out he owes an absolute fortune in income tax to the Treasury,” said a Tory grandee.
“It would certainly explain why within months of arriving at Downing Street he is said to have been complaining that he could not afford to live on a PM’s salary and started asking donors to pay for the redecoration of his flat.”
Two tax experts told the Standard that Mr Johnson would have been liable for a total of more than £350,000 — which is more than twice the £157,372 salary that Mr Johnson receives as PM.
Kevin Sefton, CEO of untied, the personal tax app, said Mr Johnson’s extra tax and national insurance bill would have been around £270,585 in the year 2018-19, and then another £103,403.11 the following year. “It’s a hefty bill,” he commented, adding that HM Revenue & Customs would respond to pleas of hardship by deferring payments or accepting instalments.
Marilyn McKeever, a tax partner at leading law firm BDB Pitmans, said that the bulge in Mr Johnson’s earning power would have made tax planning more difficult. “Self-employed people are asked to pay half their expected tax bill ‘on account’, that is, in advance. But in his case this would have been based on his earnings for the year he was Foreign Secretary, which was far less.
“So on January 31, 2020 he would probably have been asked not only to pay most of the money he owed for the 2018-19 year, but also half as much again ‘on account’ for the following year.”
She said Mr Johnson’s accountant would have advised him to put 45 per cent of his extra income aside for tax, but added: “That assumes his accountant was kept up to date about what Mr Johnson was earning.”
If Mr Johnson was caught out by an unexpected tax bill that dwarfed his official salary, it could explain why he got into so much hot water by trying to offload his expenses while living at No 10. He discussed setting up a trust so that donors would pay for a refurbishment of his free flat above 11 Downing Street.
Recently it was reported that potential donors were approached for gifts of cash to fund a nanny and a personal trainer. No 10 has not properly denied the claim, simply responding: “The Prime Minister paid for all his childcare.”
Asked if Mr Johnson had been taken by surprise by a tax bill, his spokeswoman declined to comment “on personal matters” but said the PM “pays his taxes in full”.
The register of interests reveals that Mr Johnson continues to receive royalties from his 11 books and income from property.