The Sunday Telegraph has established Mr Galloway has channelled his substantial media earnings through one service company and set up another such structure just seven weeks ago.
New details of Mr Galloway’s financial arrangements follow a dispute over a similar arrangement used by Ken Livingstone, Labour’s London mayoral candidate, who was found to have lowered his tax bill legally by receiving some payments though a personal company.
Mr Galloway, who has previously served as an MP for constituencies in Glasgow and London, was elected to represent Bradford West in a by-election 10 days ago.
Records filed at Companies House show that he is the sole director of Molucca Media Ltd, a company founded on Feb 17 this year. It is thought that it takes its name from a group of islands in Indonesia — the politician’s fourth wife, whom he married last weekend, is of Indonesian extraction.
Mr Galloway has used another company, Miranda Media Ltd, to receive his sizeable earnings as a journalist, author and public speaker for more than four years.
He earned more than £100,000 a year for a twice-weekly slot as a presenter on TalkSport radio and several £20,000 payments for presenting programmes on Press TV, the London-based Iranian TV channel. His speeches have netted him more than £5,000.
Channelling payments through a private company permits these earnings to take advantage of corporation tax of around 21 per cent rather than all of his earnings being subject to income tax, which rises to 45 per cent on earnings above £150,000.
Those who structure their affairs in this way can offset the cost of clothes, cars and other work-related expenses against their income. There are also potential savings on National Insurance.
Respect, the political party Mr Galloway represents, called for the stamping out of tax avoidance and associated loopholes in its 2010 general election manifesto.
In a speech during last year’s election campaign for the Scottish parliament, Mr Galloway said: “We support progressive taxation that means the rich will pay more. We will campaign to close all tax loopholes – this measure alone would bring in an estimated £120 billion in unpaid or avoided tax and eliminate the budget deficit in a flash.”
Last night Mr Galloway said: “As an MP I registered all of my earnings and benefits, which were then public, and I will do so again.
“My private financial affairs when I was not an MP are just that. Private. There can be no public interest argument that a private citizen must disclose his or her earnings to a prying newspaper.
“All the information about Miranda Media which requires to be disclosed has been properly disclosed in returns to Companies’ House. My new company, Molucca Media, has not traded as of today.”
Matthew Hancock, the Conservative MP who previously worked as George Osborne’s chief of staff, said: “Yet again we find an avowed socialist who doesn’t miss a trick when it comes to tax avoidance. It seems Mr Galloway wants to avoid paying his full share but is very keen for the rest of us to pay as much as possible.”
The Chancellor this weekend signalled that himself, the Prime Minister and a handful of other senior holders of public office will in future face pressure to make their tax returns public.
“My personal principle has been make the rules in general more transparent,” Mr Osborne told The Daily Telegraph. “We are happy to consider publishing tax returns for people seeking the highest offices.”
Vince Cable, the Business Secretary, later said that he would have “no problem” with making his tax return public. Mr Osborne was speaking in the wake of a dispute between Boris Johnson, the Mayor of London, and Ken Livingstone, the Labour challenger in next month’s election.
Last Thursday, the four main mayoral candidates disclosed their earnings and how much tax they paid in recent years. The disclosures confirmed that Mr Livingstone has managed to pay less tax by channelling some of his extensive media earnings through Silveta Ltd, a company he owns jointly with his wife.
Mr Livingstone has described tax avoiders as “rich --------” who should not be allowed to vote.
David Miliband, the former foreign secretary, has also created such an arrangement to receive his substantial earnings away from Westminster.
The shares in this company are split 50-50 between himself and his wife, Louise Shackleton. The South Shields MP has earned more than £300,000 from outside interests since losing the Labour leadership contest in 2010.
Mr Galloway’s Bradford West win provided ammunition for critics of Labour’s leader, Ed Miliband, as the party had won the seat at the 2010 general election with a majority of 5,763 votes.
Despite facing considerable ridicule since his appearance on the reality TV show Celebrity Big Brother in 2006, Mr Galloway secured 56 per cent of the vote with a majority of more than 10,000.
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