UK Politics

Britain’s Treasury chief has defended his wife’s decision to take advantage of rules that allow many foreigners to escape U.K. taxes on their overseas income, saying critics have launched a smear campaign against her to get at him.In an interview with the Sun newspaper, Rishi Sunak said that he expects scrutiny as a politician but it is unfair to attack his wife, Akshata Murty, who is a private citizen with her own career and independent investments. Murty, a fashion designer and businesswoman, is also the daughter of the Indian billionaire who founded the information technology company Infosys.Opposition politicians have demanded more details about Murty’s finances after she confirmed she had “non-domicile” tax status, which allows people who aren’t permanent residents to avoid British taxes on money earned overseas. The issue is sensitive for Sunak because he just increased the income taxes most U.K. residents pay in the middle of a cost-of-living crisis.“To smear my wife to get at me is awful,’’ Sunak was quoted as saying. “Every single penny that she earns in the U.K. she pays U.K. taxes on, of course she does. And every penny that she earns internationally, for example in India, she would pay the full taxes on that.”Sunak said Murty was entitled to use the arrangement because she is an Indian citizen and intends to move back to her home country at some point to care for her aging parents.But the opposition Labour Party rejected Sunak’s explanation, given that Murty has lived in Britain for many years and is married to one of the most powerful men in the country. Sunak and his wife also live in an official government residence that comes with his job as Chancellor of the Exchequer.“In the end, we have somebody who’s been living here for eight years, raising her children here, living … in accommodation provided by the taxpayer and aspiring to be the wife of the next prime minister, and yet she says that she isn’t a permanent resident of this country,” Emily Thornberry, Labour’s spokeswoman on legal issues, told the BBC.“What’s relevant is that she’s of the 0.1% of the population who have positively chosen to say that although they’re living here, they’re not living here permanently, and taking advantage of that decision in order to not pay as much tax,” she said.Claiming non-domicile status is entirely legal under U.K. tax rules that have been in place for more than 200 years.Under those rules, people who declare that they aren’t permanent residents of the U.K. can opt not to pay British income taxes on overseas income. They are still required to pay U.K. taxes on any income earned in Britain and any overseas earnings they bring into the country.So-called non-doms must pay an annual fee of 30,000 pounds to continue enjoying these tax advantages once they have lived in Britain for seven of the previous nine years. The fee rises to 60,000 pounds once they are resident for 12 of the previous 14 tax years. The tax advantages aren’t available after 15 years.Murty holds a 0.91% stake in Bengalaru, India-based Infosys, according to the company’s most recent annual report. That stake would have generated dividends equal to more than 10.6 million pounds ($13.8 million) in the 2020-21 financial year.Murty is also a director of the private equity firm Catamaran Ventures UK, according to UK government records.Sunak said he recognized that non-domicile status has a bad reputation because some wealthy British people have tried to used it to avoid paying taxes, but that isn’t the case with his wife.“She has her own investments and is paying the taxes that she owes in the U.K.,” he told the Sun. “She is 100% doing everything this country asks of her.” More

Chancellor Rishi Sunak and his allies have hit out at “unpleasant smears” as he come under scrutiny over his wife’s tax-reducing non-domiciled status, while No 10 denied being behind the leaks.Energy minister Greg Hands claimed Akshata Murty’s non-dom tax arrangements were “not unusual” and aid the commentary around Mr Sunak’s wife was “a little bit unpleasant, to be frank”.Asked about Ms Murty’s decision to choose an exemption from paying tax in the UK on foreign income, Mr Hands told LBC: “That is not unusual for somebody who is a foreign national.”The minister added: “She is an Indian national and her affairs in that regard are not unusual for somebody who is not domiciled here, but is a foreign national.”Ms Murty, who married the chancellor in 2009, has confirmed she paid £30,000 to hold non-dom status after The Independent revealed the arrangement earlier this week.Mr Sunak has blamed Labour for the tax details emerging, but his allies have told newspapers that they suspect No 10 of trying to undermine the chancellor – who has been seen as a favourite to succeed Boris Johnson in any leadership challenge. More

‘Keep families out of it’: Johnson dodges question on Sunak wife tax affairsNo 10 has denied leaking information about Rishi Sunak’s household finances, as a senior Conservative MP has called for a review into non-domicile tax rules in the wake of the revelations first reported by The Independent.Tobias Ellwood said the current rules “are out of date” but insisted this did not mean the chancellor or his wife, Akshata Murty, had broken the law. “If the rules as a whole need to be changed, let’s have that debate,” he said.The ex-minister’s comments came as Emily Thornberry, the shadow attorney general, accused Ms Murty of being in the “0.1 per cent of the population” who choose to “take advantage” of the non-dom system “in order to not pay as much tax”.Speaking to Radio 4’s Today programme, the Labour MP said Ms Murty was somebody who has been living in the UK “for eight years, raising her children here, living at … Downing Street in accommodation provided by the taxpayer … and yet she says that she isn’t a permanent resident of this country”.Show latest update

1649428530Lib Dems call for Whitehall investigation into Sunak and US green card claimsOur politics reporter Adam Forrest writes:The Liberal Democrats have called for the cabinet secretary to launch an investigation into chancellor Rishi Sunak after reports emerged that he previously held a US Green Card.Lib Dem leader Ed Davey has written to the cabinet secretary Simon Case – and the Independent Adviser on Ministers’ Interests Lord Geidt – urging them to open an investigation into whether Sunak broke the ministerial code by failing to declare his residency in the US.Sir Ed Davey MP: “How could the man who is responsible for UK tax policy regard any permanent residency status for the United States as acceptable? This would be a huge conflict of interest – and a serious breach of the ministerial code.”“Rishi Sunak must come clean about his own financial arrangements and whether he has ever held a Green Card. If he will not, then we need an independent investigation to get to the bottom of this.”Sam Hancock8 April 2022 15:351649428405What are India’s non-dom tax rules and why might Sunak’s wife benefit from them?British chancellor Rishi Sunak is facing questions after The Independent revealed that his wife, Akshata Murthy, pays no tax in the UK on her vast foreign earnings, potentially saving her millions of pounds.In a statement on Thursday, the chancellor defended his family’s financial affairs and hit out at what he called “smears” directed at his family, adding that scrutiny of his wife was unfair because she is a “private citizen”.To understand Ms Murthy’s tax liability in India, experts said that is important to first clarify whether she is a resident or non-resident taxpayer in the country, writes Sravasti Dasgupta.Sam Hancock8 April 2022 15:331649426775Watch: Starmer says Sunak must ‘come clean’ on family tax affairsKeir Starmer says Rishi Sunak must ‘come clean’ on family tax affairsSam Hancock8 April 2022 15:061649426559Dame Cressida warns against ‘politicisation of policing’ in final days as commissionerOutgoing Met Police commissioner Cressida Dick has warned against the “politicisation of policing”, saying this is “a threat not just to policing but to trust in the whole criminal justice system”.She left Scotland Yard for the final time this morning – though her official end of employment date with the Met is 24 April – and was applauded by officers as she walked out.Sky’s Scott Beasley reports:In a “letter to London”, which she wrote to mark the end of her post, Dame Cressida said: “Of course as I look back there is more I wish we had achieved. We hear the criticism, know not everyone has confidence in us to provide a good service when they need us, and have seen among us those whose horrific actions have let you all, and us, down so terribly.“Each one drives us to get better, to root out those who don’t uphold our standards and don’t deserve to wear our uniform. To improve our response so all our communities feel protected by us.“We are listening and acting on what you tell us so we can change for the better. Just this week we launched our violence against women and girls plan, shaped by the views of hundreds of Londoners.“The current politicisation of policing is a threat not just to policing but to trust in the whole criminal justice system. Operational independence from local and central government is crucial for an effective democracy and is a model respected around the world. We must all treasure and protect it.”Sam Hancock8 April 2022 15:021649425790Sunak: Wife’s non-dom tax status ‘not unusual’, claims ministerChancellor Rishi Sunak and his allies have hit out at “unpleasant smears” as he came under scrutiny over his wife’s tax-reducing non-domiciled status, while No 10 denied being behind the leaks.Ms Murty, who married the chancellor in 2009, has confirmed she paid £30,000 to hold non-dom status after The Independent revealed the arrangement earlier this week.Mr Sunak has blamed Labour for the tax details emerging, but his allies have told newspapers that they suspect No 10 of trying to undermine the chancellor – who has been seen as a favourite to succeed Boris Johnson in any leadership challenge. A No 10 spokeswoman denied the PM’s office was sharing any details.Adam Forrest has more:Sam Hancock8 April 2022 14:491649425214Germany’s Scholz arrives at No 10 for talks on Ukraine with PMGerman chancellor Olaf Scholz arrived at Downing Street within the last half an hour for talks with Boris Johnson on reducing Europe’s dependence on Russian gas following the attack on Ukraine.The UK prime minister greeted Mr Scholz at the door of No 10 at 2.13pm on Friday.Mr Scholz smiled and nodded at reporters gathered outside before shaking hands with Mr Johnson.They are set to hold a press conference later this afternoon, after talks behind closed doors. More

Rishi Sunak and his wife were legally declared to be “permanent US residents” while he was chancellor of the UK, it has been reported.The claim comes after The Independent revealed that the Chancellor’s spouse Akhshata Murty has non-domiciled status despite residing in Downing Street – potentially letting her off the hook for around £4.4 million in tax.Now Sky News reports claims that the Downing Street couple held US “green cards” permitting them residence in the United States until more than a year into his chancellorship.Holders of the green card are required to file US tax returns on their worldwide income – and also to make a legal commitment to “make the US your permanent home”.The pledge would seemingly be at odds with Mr Sunak’s position as Chancellor of the United Kingdom, being a member of parliament since 2015 and minister since 2018, and the fact he lives on Downing Street. A source told the broadcaster that “neither of them have green cards” currently – but would not be drawn on whether the pair had held the US residence cards since Mr Sunak had been chancellor. Mr Sunak and his wife both initially lived in California after their wedding in 2009.The Independent has approached the Treasury for further comment but not yet received a response at the time of publication. Mr Sunak lives in the flat above No 10 Downing Street with his wife and two daughters, while Boris Johnson and his family live at No 11, which was until recently the traditional home of the Chancellor of the Exchequer.Liberal Democrat leader Ed Davey on Friday afternoon said he had written to the Cabinet Secretary Simon Case and the Independent Adviser on Ministers’ Interests Lord Geidt, asking them to open an investigation into whether Mr Sunak had broken the the ministerial code by failing to declare his residency in the United States.”How could the man who is responsible for UK tax policy regard any permanent residency status for the United States as acceptable? This would be a huge conflict of interest – and a serious breach of the Ministerial Code,” Mr Davey said.”Rishi Sunak must come clean about his own financial arrangements and whether he has ever held a Green Card. If he will not, then we need an independent investigation to get to the bottom of this.”It comes as senior Conservative MP Tobias Ellwood calls for a review of non-dom tax rules in the wake of revelations about Mr Sunak’s household finances.The select committee chair and ex minister said the current rules “are out of date” and “do need to be reviewed”.Opposition parties last night joined forces to demand answers from the chancellor after it emerged Ms Murty pays no UK tax on her huge foreign earnings.Tax lawyers also dismissed Ms Murty’s claim that her non-dom status is a consequence of her Indian citizenship, pointing out that she has chosen to adopt it.Condemning what he said was “breathtaking hypocrisy”, Sir Keir Starmer called for answers about “what schemes she may have been using to reduce her own tax”, a demand echoed by the Liberal Democrats and the Scottish National Party.Ministers earlier attempted a fightback, condemning what one called “malicious attacks” on a private citizen, while another accused Labour of believing that “wives are merely an extension of their husbands”.Mr Sunak broke his silence on Thursday night to accuse Labour of running a smear campaign against his family, adding: “To smear my wife to get at me is awful, right?”The chancellor told The Sun: “I appreciate that in the past British people were trying to use [non-dom status] to basically not pay any tax in the UK. I can see that from my inbox, right? That’s a very clear perception.“But that’s not the case here. She’s not a British citizen. She’s from another country. She’s from India. That’s where her family is… that’s where she, you know, ultimately will want to go and look after her parents as they get older.“She pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally, say, in India.”Earlier on Thursday, Boris Johnson ducked questions about the controversy, arguing: “I think it is very important in politics, if you possibly can, to try and keep people’s families out of it.” More

Home secretary Priti Patel has apologised “with frustration” over the time it is taking for Ukrainian refugees to arrive in the UK under visa schemes.However, Ms Patel denied claims that the visa requirements were causing unnecessary delays, insisting the UK will “absolutely see changes in numbers” as work continues.It comes as the latest Home Office figures showed that only 1,200 people fleeing the Russian forces had made it to the UK as part of the Homes for Ukraine sponsorship scheme.Ms Patel said: “I apologise with frustration myself … it takes time to start up a new route,” she said in a pre-recorded interview with the BBC, which aired on Friday.The cabinet minister said it is “always easy to blame someone else” – but insisted that visa system security checks “are not the problem” when it comes to the time it is taking for Ukrainian refugees to reach the UK.Around 12,000 people had arrived in the UK under Ukraine visa schemes, according to the latest Home Office figures – with the majority coming under the family scheme available to those with relatives in Britain.But less than 3 per cent the 43,600 Ukrainians who have applied to come under the Homes for Ukraine sponsorship scheme have been able to arrive in Britain since the route opened three weeks ago.Asked about the “huge frustration” among members of the public experiencing three to four week delays in being able to put people up, Ms Patel replied: “They’re not seeing delays.”The home secretary said security checks needed under the Home Office’s visa system were “not the problem” and were “not slowing the process up”.She added: “We are processing and, as I’ve said as well, I’m streamlining processes. I streamlined the family scheme in less than a week, and we simplified that and we changed the way certain checks are done. Also, I’m working to automate where we can.”Asked why Britain is playing “catch up” with other countries in Europe when it comes to welcoming refugees, Ms Patel said comparisons with EU members are not “like for like”.“We want to give people the status and security of coming to our country along with the warm welcome … We have to ensure that they are protected and safeguarded in the United Kingdom as well”, she added.The Refugee Council accused ministers of “choosing control over compassion” by insisting on visa requirements which EU countries have dropped.Chief executive Enver Solomon said Britons who are prepared to open up their homes have been left feeling “angry and frustrated that their gesture of support has been lost into a web of bureaucracy and chaos”.He added: “It’s clear that the visa schemes which were supposedly designed to ensure the safety of Ukrainians fleeing war and bloodshed are unfit for purpose.”Liberal Democrat leader Sir Ed Davey has called for the home secretary to resign over her “failure” to help those fleeing was effectively enough.“We want to offer Ukrainians a home, but Priti Patel has slammed the door in their face,” Sir Ed tweeted. “An apology isn’t enough. She must resign.”Yvette Cooper MP, shadow home secretary, said the latest figures were “scandalous and shameful”, adding: “Over thirty thousand people with British sponsors waiting are still stuck in limbo – around half of whom have been waiting more than ten days already to hear anything.”The senior Labour figure added: “British families have offered Ukrainians sanctuary in their hour of need, but the home secretary is letting everyone down.”The Independent has a proud history of campaigning for the rights of the most vulnerable, and we first ran our Refugees Welcome campaign during the war in Syria in 2015. Now, as we renew our campaign and launch this petition in the wake of the unfolding Ukrainian crisis, we are calling on the government to go further and faster to ensure help is delivered. To find out more about our Refugees Welcome campaign, click here. To sign the petition click here. If you would like to donate then please click here for our GoFundMe page. More

British chancellor Rishi Sunak is facing questions over his family’s financial affairs after it emerged that his wife Akshata Murthy pays no tax in the UK on her vast foreign earnings, potentially saving her millions of pounds.On Thursday, The Independent revealed that Ms Murthy has claimed non-domicile status in order to save on taxes. In a statement, she said that she had to use the special status because of her Indian citizenship. Ms Murthy, whose family business is estimated to be worth around £3.5bn, has continued to use the valuable tax status even after Mr Sunak became the chancellor in February 2020.A spokesperson for Ms Murthy said: “India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.”The revelation has earned the chancellor the ire of the opposition, just days after he raised taxes for millions of people in the UK, compounding the cost of living crisis through his spring statement.Mr Sunak has not declared his wife’s shareholdings on the Register of Members’ Interests and previously said he has ”followed the ministerial code to the letter”.In a statement on Thursday Mr Sunak defended his family’s financial affairs and hit out at what he called “smears” directed at his family, adding that scrutiny of his wife was unfair because she is a “private citizen”.To understand Ms Murthy’s tax liability in India, experts said that is important to first clarify whether she is a resident or non-resident taxpayer in the country.Under the Indian income tax law, an individual’s residential status plays a vital role in their taxability.According to the Indian government’s tax authority, the Income Tax Department, for the purposes of income tax law, an individual can have any one of the following residential status: Resident and ordinarily resident in India (also known as resident), Resident but not ordinarily resident in India, and Non-resident.The residential status of the individual is reviewed every year and depends on their physical presence in the country in the previous financial year.Under the Finance Act 2020, an Indian citizen shall be deemed to be resident in India or a person of Indian origin whose total income (other than income from foreign sources) exceeds Rs. 15 lakhs (£15,185) during the previous year, and who has been in India for a period of 120 days or more but less than 182 days.“However, such individual shall be deemed to be Indian resident only when he is not liable to tax in any country or jurisdiction by reason of his domicile or residence or any other criteria of similar nature.”Explaining the rules, Ashutosh Chaturvedi, partner at PricewaterhouseCoopers in New Delhi, said to The Independent: “A tax resident in India is required to pay taxes on their global income. If they are a non-resident, they should pay tax only on Indian income.”Income tax rules also suggest that a non-resident Indian who is either a citizen of India or a person of Indian origin, is also required to designate their existing resident (Indian) bank accounts to non-resident accounts due to a change in their residential status.Ms Murthy is an entrepreneur with a range of business interests and met Mr Sunak while the two were studying in Stanford University in the US.Born in India, she is the daughter of one of India’s richest businessmen Narayan Murthy, co-founder of Infosys, and hailed as the father of India’s IT boom.While Infosys is only one of Ms Murthy’s business investments, dividends from Infosys calculated from her stake in the company of 0.93 per cent suggest the payments could have totalled around £11.6m in the past year, The Independent had reported.As a non-dom, Ms Murthy would not have had to pay tax on these dividend payments in the UK, therefore saving a bill of around £4.4m in tax in the UK.The non-dom status means she would not have to pay UK tax at a rate of 39.35 per cent on dividends. India sets the rate for non-residents at 20 per cent, but this can fall to 10 per cent for those who are eligible to benefit from the UK’s tax treaty with India.The treaty was signed between the two countries in 1993 for the purpose of avoiding double taxation and prevention of fiscal evasion with respect to taxes on income and capital gains.“From an Indian perspective if she is a tax resident of UK, then she is a nonresident in India. If she receives dividend on her income from Infosys, she will suffer tax as a non-resident taxpayer in India. As a nonresident taxpayer, she will also be eligible under the India-UK treaty in this scenario which allows her tax concessions in the UK,” Mr Chaturvedi said.Speaking to The Independent, Suranjali Tandon, assistant professor at National Institute of Public Finance and Policy, a New Delhi-based think tank that assists the Indian government in formulating policies, said that the non-domiciled resident taxpayers have a special advantage in planning their tax liabilities due to the treaty.“An individual who holds an Indian citizenship, can’t hold dual citizenship and for UK tax purposes will be treated as non-domiciled resident taxpayers which allows them a special advantage to plan their tax liability through the exemption of foreign incomes, provided they have not stayed for more than 15 years or have severed family ties for them to be deemed domiciled in UK.”Ms Tandon added that this regime proves to be “beneficial” as “you get this golden opportunity of non-dom status to minimise tax liabilities.”“In effect, if Ms Murthy is a nonresident, which she should be as she has been living in the UK and is married there, she will be paying taxes as a non-resident tax payer in India which would include tax liabilities on her Indian income and suffer lower tax rates on her UK income due to her non-domicile status,” Mr Chaturvedi added. 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A private jet owned by Russian billionaire Eugene Shvidler has been banned from flying in the UK as part of sanctions in response to the war in Ukraine.Transport secretary Grant Shapps announced that he has deregistered the aircraft, meaning any certificates in place to permit it to fly have been suspended.The Cessna aircraft with the tail registration G-LATO is at Biggin Hill Airport, in south-east London, where it was due to undergo maintenance and repairs.The jet, estimated to be worth £35m, was blocked from leaving on 19 March on the order of Mr Shapps to enable an investigation into its ownership to be carried out.Mr Shvidler is a friend of Chelsea FC owner Roman Abramovich. He is a former boss and shareholder in Mr Abramovich’s steel firm Evraz, and his net worth has been estimated at £1.2 billion.The transport secretary said: “Russian oligarchs who have benefited from Putin’s regime will not be allowed to just go about their business as they were before this completely unprovoked war started.”Speaking on a visit to Biggin Hill Airport to see the jet, he added: “That’s why we’re actually stripping this off the British aircraft register. This plane will not be going anywhere for the foreseeable future.”Another plane owned by Mr Shvidler, a Bombardier Global 6500 jet, has been detained at Farnborough Airport in Hampshire since 8 March.Mr Shapps said finding out who controls private aircraft is often “extremely complex”.Asked about reports that a private jet held at Luton Airport is linked to Russian oligarch Yevgeny Prigozhin, Mr Shapps replied: “There are a number of aircraft and some other ships as well, yachts, which we’re working very closely with the authorities on.”He added: “We won’t hesitate to make sure that we sanction, detain, strip all of these vessels.”The cabinet minister also announced that all Russian aircraft are now classified as “unairworthy in UK eyes” because “they’re now not being serviced properly” due to sanctions.The planes were already banned from UK airspace following Russia’s invasion of Ukraine.On 29 March, Mr Shapps ordered the detention of the £38m superyacht Phi owned by an unnamed Russian businessman in Canary Wharf, east London.It comes as the UK government added Vladimir Putin’s two adult daughters to its sanctions list in a move as part of crackdown on the “lavish lifestyles” of the Kremlin’s inner circle.The Foreign, Commonwealth and Development Office (FCDO) announced asset freezes on Katerina Vladimirovna Tikhonova and Maria Vladimirovna Vorontsova on Friday – mirroring US sanctions imposed earlier this week. More

Boris Johnson’s government has added Russian president Vladimir Putin’s two adult daughters to its sanctions list in a move as part of crackdown on the “lavish lifestyles” of the Kremlin’s inner circle.The UK announced asset freezes on Katerina Vladimirovna Tikhonova and Maria Vladimirovna Vorontsova on Friday – mirroring US sanctions imposed earlier this week.The Foreign, Commonwealth and Development Office (FCDO) said it was also targeting the daughter of Russian foreign minister Sergei Lavrov with travel bans and asset freezes.“The lavish lifestyles of the Kremlin’s inner circle will be further targeted from today as the UK sanctions the adult daughters of president Vladimir Putin and his foreign minister Sergei Lavrov,” said the FCDO.“Katerina Vladimirovna Tikhonova and Maria Vladimirovna Vorontsova, the daughters of President Putin, and Yekaterina Sergeyevna Vinokurova, daughter of foreign minister Sergei Lavrov, will be subject to travel bans and asset freezes.”The EU has also targeted Putin’s daughters, whose mother is Mr Putin’s former wife Lyudmil Shkrebnevina, its latest raft of sanctions over its invasion of Ukraine, two officials said on Friday.The apparently co-ordinated action from Europe comes two days after Joe Biden’s administration sanctioned the pair. A senior US official claimed “many of Putin’s assets are hidden with family members”.Foreign secretary Liz Truss said the sanctions were “hitting the elite and their families, while degrading the Russian economy on a scale Russia hasn’t seen since the fall of the Soviet Union”.But she said the UK and its allies “need to do more”, ahead of Mr Johnson’s meeting with German chancellor Olaf Scholz on Friday – with the PM expected to push Germany to reduce its dependence on Moscow’s oil and gas.“Through the G7, we are ending the use of Russian energy and hitting Putin’s ability to fund his illegal and unjustified invasion of Ukraine,” said Ms Truss. “Together, we are tightening the ratchet on Russia’s war machine, cutting off Putin’s sources of cash.”The FCDO said analysis showed that Russia could heading for its deepest recession since the collapse of the Soviet Union, as estimates for GDP growth in the country for 2022 now range from -8.5 per cent to -15 per cent. More