Boris Johnson has revealed that he is refusing to pay a tax demand issued to him by US authorities – despite previously lambasting the US embassy in London over its failure to pay the congestion charge.
The mayor of London, who was born in New York and holds a US passport as well as a British one, visited the country last week to promote his book and said during an interview with NPR (National Public Radio) that he had been hit with a demand for capital gains tax.
He said the US demand related to his first home in the UK, which was not subject to capital gains tax in England.
All US citizens, including those with dual citizenship, are legally obliged to file a tax return and liable to pay US taxes, wherever they are living, even if the income is earned abroad.
Asked whether he would pay the bill, Johnson initially avoided the question. But when it was put to him a second time, he replied: “No is the answer. I think it’s absolutely outrageous. Why should I? I think, you know, I’m not a … I, you know, I haven’t lived in the United States for, you know, well, since I was five years old … I pay the lion’s share of my tax, I pay my taxes to the full in the United Kingdom where I live and work.”
Johnson, who is bidding to return to parliament at the next general election and has been tipped to replace David Cameron as leader if the Tories lose power, was then asked why he continued to carry a US passport, to which he responded: “It’s very difficult to give up.”
Johnson has continually pressed the US embassy to pay unpaid fines it has incurred for the congestion charge. The embassy has refused to do so, claiming the charge is a tax and therefore its diplomats are immune. During a visit to the UK by Barack Obama in 2011, Johnson reportedly asked him for a £5m cheque for unpaid congestion charges but the US ambassador intervened before the president could answer. By last year the amount the US embassy owed in congestion charge fines had risen to more than £7m, the most of any diplomatic mission in the capital.
Johnson would also be liable to pay US income tax as he earns well above the foreign-earned income exclusion – the level up to which no tax is paid on income earned by US citizens overseas – which was set at $97,600 (£62,000) last year. As mayor, he earns a salary of £144,000and on top of that he is paid £250,000 a year for his column in the Telegraph. Johnson did not disclose whether he paid US taxes on his income during the interview. The mayor’s spokesman said he would not be commenting further on his US tax affairs.
