Angela Rayner is fighting for her political future after finally admitting to have avoiding £40,000 in tax when purchasing a property.
The deputy prime minister has faced mounting calls to resign after revealing she underpaid the amount of stamp duty owed on the purchase of an £800,000 seaside flat in Hove.
Admitting to the error after weeks of speculation, Ms Rayner blamed the error on dodgy legal advice in an emotional statement.
But critics, including Tory leader Kemi Badenoch, questioned whether it is appropriate for her to continue as housing secretary having sought to minimise her tax bill while Labour looks set to unleash a multi-billion pound tax raid in November’s Budget.
Sir Keir Starmer backed his deputy as Ms Rayner referred herself to the prime minister’s independent ethics advisor, who will interview her over the property purchase in the coming days as part of an investigation into the scandal.
Ms Rayner said she relied on legal advice which turned out to be inaccurate relating to the purchase. “As soon as I knew that that was the case, I have alerted and referred myself to the independent adviser on the ministerial code to ensure that they can look transparently at what has happened, and also contacted HMRC to say that, there is additional tax owing on this,” she told Sky’s Electoral Dysfunction podcast.
“I’m prepared to pay that and fully comply with the HMRC as well,” she added. The underpayment of tax relates to Ms Rayner having disposed of her equity in a home in her Greater Manchester constituency, which she said led to her initially being advised it was no longer her primary residence. She was later informed after intense press scrutiny of the purchase that this was not the case, and that she should pay the stamp duty owed.
Ms Badenoch insisted Ms Rayner should quit as deputy prime minister and housing secretary, while Sir Keir said he has “full confidence” in his deputy.
At PMQs, the prime minister said he was “very proud to sit alongside” his deputy at and praised her decision to refer herself to the independent ethics adviser. But Tory leader Ms Badenoch said “if he had a backbone, he would sack her”.
Questions began swirling last Sunday when the purchase of the Hove property was first reported, with critics later focusing on the issue of whether Ms Rayner had paid the correct amount of stamp duty.
Downing Street is facing mounting questions over when the PM knew Ms Rayner had underpaid stamp duty and why he initially dismissed criticism of her tax affairs as “people briefing against her and talking her down over and over again”.
Ms Rayner said accusations she avoided paying stamp duty on the purchase of the Hove apartment are accurate, but accurate “in a different sense”.
She set out how she had a court order against answering questions over her tax affairs sooner, relating to her 2023 divorce. And Ms Rayner said a trust was set up in 2020 for her disabled son to deal with his finances. The home she owned in her Ashton constituency was placed in the trust, she said, at which point she cashed in her 25 per cent ownership of the home to purchase the Hove apartment.
She said: “I think the accusations were that I set up a trust and I flipped it to try and avoid paying it. But actually the complex area of the trust which the advice that I relied upon didn’t pick that up.”
Asked whether she was trying to dodge tax, Ms Rayner said “no… the trust was set up by a court to provide for my son after an injury”. But the revalation comes at a time when the government is set to hike taxes in order to fill a multi-billion pound black hole in the public finances, with Rachel Reeves expected to target wealth through taxes on second homes.
Shadow chancellor Mel Stride said it is “utterly extraordinary that while working families and businesses are being hammered by Labour’s tax hikes, Angela Rayner has failed to pay the right amount of stamp duty”. He added: “The deputy prime minister should not be setting the rules when she fails to keep them herself.”
Asked whether she considered resigning over the tax issue, Ms Rayner said she talked to her ex-husband about the prospect and that “the number one priority for me and my ex-husband has always been to support our children and do the best thing for our children”.
And she said: “I made a mistake based upon the advice that I relied upon that I received at the time, and a leading expert has now said that advice was wrong.”
Ms Rayner appealed to the public to see that “most people make mistakes”, adding: “I conducted myself in trying to do the right thing, and I hope that people can see that.”
Ms Rayner, who is also the housing secretary, saved an estimated £40,000 in stamp duty on the purchase of her Hove flat because she removed her name from the deeds of a family property in her Ashton-under-Lyne constituency, meaning the Hove property is the only property she owns.
However, Ms Rayner also previously indicated the Greater Manchester home remains her primary residence, according to the Telegraph, saving some £2,000 in council tax on her grace and favour home in central London at Admiralty House. Legal advice later taken by Ms Rayner concluded that while she no longer owned the Greater Manchester home, she would still be liable to pay the additional stamp duty.
