Rishi Sunak’s huge earnings are “a positive” because wealthy people pay a lot of tax, Conservative chairman Greg Hands has said.
The prime minister has raked in more than £4.7m over the past three years and paid £1m in tax, a summary statement published on Thursday revealed.
Most of his mammoth income comes from a US-based investment fund outside of his salary at Westminster.
But Mr Hands described Mr Sunak’s earnings and tax bill as a “positive”, saying “we want to have, in this country, wealthy people paying a lot of tax”.
He told ITV’s Peston: “I think we should be proud of the fact that people are paying tax in this country and proud of the fact they’re financing our excellent public services.”
Mr Hands also told Sky New that the PM “comes from a relatively modest background” and that his parents “saved up a lot of money” to send him to the private school Winchester.
Asked if Rishi Sunak’s tax return, showing the PM made more than £1.9m last year, Tory peer Lord Hayward told Sky News: “Everybody knows he is a rich man.”
The party polling guru added: “He married well. He has got a big income but he has disclosed it. People have to judge it on that basis. But it doesn’t come as a surprise that he is a rich man.”
Mr Sunak – regarded as among the richest ever inhabitants of No 10 – first pledged to publish his tax returns during his unsuccessful campaign to become Tory leader last summer in an attempt to put transparency at the heart of his bid.
A statement from Mr Sunak’s accountants showed that his huge investment income – he made £1.6m in capital gains last year alone – relate to a single US-based investment fund.
This is the investment listed as a “blind management arrangement” on the list of ministers’ interests. Mr Sunak is subject to UK tax on the investment income and gains received from the American fund.
Tax expert Dan Neidle said Mr Sunak had done nothing wrong – but noted how little capital gains are taxed (20 per cent tax) compared with most people’s income tax (up to 47 per cent).
“Whether that is a fair result, whether the law should be like that is a very good question,” he told Sky News. “And weirdly Mr Sunak – who benefits from that low rate – is also the man who has the power to change it.”
Mr Neidle, founder of Tax Policy Associates, also said the blind trust that Mr Sunak declared on his tax return is “slightly fuzzy” in legal terms.
He added: “I believe it is an arrangement where, to avoid any conflict of interest, Mr Sunak’s assets are managed by someone – I don’t think we know who – and he doesn’t get to see exactly what they are … But I don’t think we have any details on it beyond that.”
Robert Palmer, head of Tax Justice UK, said: “Rishi Sunak’s tax rate last year was 22 per cent. That’s the same tax rate as a nurse. Time to tax the super-wealthy properly.”
Labour leader Sir Keir Starmer is now set to publish his own tax returns later on Thursday. Labour’s deputy leader Angela Rayner has said Mr Sunak’s tax summary shows he pays a “far lower tax rate than working people”.
But Labour’s shadow home secretary Yvette Cooper appeared to swerve questions on whether Labour would reform capital gains tax so it is equalised with income tax.
Pressed again on Ms Rayner’s apparent reference to capital gains tax, she said: “Rachel Reeves sets out our tax proposals … as I said, the point that Angela is making is a broader one, about the way in which the Conservatives have always ended up cutting the taxes.”
No 10 said that Mr Sunak would continue to release his tax returns. The prime minister’s official spokesman said: “I believe we will continue to provide an update.”
Downing Street also said chancellor Jeremy Hunt would release his return once he had completed a full year in post.
