Angela Rayner faces sleaze inquiry over tax dodge

Angela Rayner is facing an ethics investigation over whether she paid the correct tax on her various homes.

The Deputy Prime Minister admitted on Friday night that she removed her name from the deeds of her family house before buying a seaside flat 250 miles away that saved her £40,000 in stamp duty.

At the same time, Ms Rayner, who is also Housing Secretary, insisted her old home in Greater Manchester remained her main residence. In doing so, she has been able to avoid paying £2,000 in council tax on a third property, a grace and favour flat in central London.

On Friday night, the Tories referred Ms Rayner to Sir Laurie Magnus, the Prime Minister’s independent adviser on ministers’ interests, saying her behaviour had been “unethical”. They accused her of “hypocritical tax avoidance by a minister who supports higher taxes on family homes, high-value homes and second homes”.

Sir Laurie will decide in the coming days whether to launch an investigation.

The Telegraph disclosed on Thursday that Ms Rayner had saved £40,000 in stamp duty on the property in Hove, East Sussex, by removing her name from the deeds of her house in Ashton-under-Lyne a few weeks before buying the £800,000 seaside property.

These changes, which are legal, allowed Mr Rayner to avoid paying the full £70,000 in stamp duty, which was the rate for a second home. As it is, she is thought to have paid £30,000 in stamp duty.

Rayner’s residences

However, she has also told Tameside council in Greater Manchester that her constituency home in Ashton-under-Lyne is her primary residence, and Brighton and Hove council that the Hove flat is a second home for council tax purposes.

On Friday night, Downing Street said Sir Keir Starmer still had confidence in his deputy.

In his letter to Sir Laurie, Kevin Hollinrake, the Tory party chairman, said there were questions over whether she had fallen foul of requirements in the ministerial code to have her tax affairs in good order.

Mr Hollinrake suggested Ms Rayner should be forced to remove herself from government decisions on council tax on second homes.

He also said she should lose use of her grace and favour London flat in Admiralty House, or at least start paying council tax on it. At present, the Cabinet Office pays because she claims it is not her primary residence.

Mr Hollinrake said her decision to tell HMRC that her Hove home was her primary residence “collapses the house of cards that Tameside is her primary home”.

He said: “She is paying second homes council tax to Brighton and Hove council on a property that she tells HMRC is not a second home. This may be lawful, but it is inappropriate tax avoidance for a minister subject to higher standards of conduct.”

Mr Hollinrake said it was likely that Admiralty House was in fact her primary home, meaning it was wrong for the Cabinet Office to continue to pay her council tax. 

“As with the Prime Minister and Chancellor, she must pay the council tax bill personally,” he said.

“It is in this light that I believe the ministerial code has been breached, and her tax affairs are not in good order. This directly engages her conduct as a minister.”

Rayner ‘has skin in the game’ on second homes

The Tory chairman added: “Her wider behaviour as a minister is unethical and lacks integrity, and this necessitates a formal investigation of whether the ministerial code has been breached.

“If so, at the very least, an appropriate sanction could be to strip her of her ministerial residence.

“You will also want to consider whether the Deputy Prime Minister must now recuse herself from all policy matters relating to taxation on second homes, given her skin in the game.”

However, sources close to Ms Rayner continued to insist that she had done nothing wrong.

Confusion over Ms Rayner’s living situation deepened last night after it emerged that she appeared not to have formally applied to be removed from the deeds of her constituency home.

The Land Registry said an application was made to change the deeds of the Ashton-under-Lyne house but told The Times: “While we cannot offer any confirmation, [the application documents] do not appear to support the claim that she ‘removed her name from the deeds’.”

The latest disclosures prompted growing calls for Ms Rayner to be transparent about her tax affairs.

In a statement, her spokesman said on Friday night: “The Deputy Prime Minister paid the relevant duty owing on the purchase of the Hove property in line with relevant requirements and entirely properly. Any suggestion otherwise is entirely without basis.”

Sources close to Ms Rayner said she had divorced her husband and “ceased to own a stake” in the family home in Ashton-under-Lyne some time before buying the Hove flat. But she continued to insist that the Ashton house remained her primary residence because her children still lived there. Sources said she regularly visited them, although some neighbours have said they never saw her.

Ms Rayner also insists she has followed all advice and complied with longstanding rules, at all times, and “paid all relevant and required tax”.

It doesn’t look good, say Labour MPs

However, one Labour MP said: “It really doesn’t look good. For ordinary people who are struggling, it doesn’t correspond to how people live their lives.”

Another said: “She really could have shut this all down by just being more transparent.”

HMRC refused to comment on whether it had launched an investigation into Ms Rayner’s tax affairs.

The news of Ms Rayner’s actions will make it politically difficult for Rachel Reeves to increase taxes on landlords in this autumn’s Budget.

Sir Laurie is a former City financier who was appointed by Rishi Sunak as the prime minister’s adviser on ministerial interests in 2022. Sir Keir gave him the power to launch his own inquiries two years later.

Earlier this year, Tulip Siddiq, the City minister, referred herself to Sir Laurie following corruption allegations relating to her links to Bangladesh. Less than two weeks later, she was forced to resign after Sir Laurie found she had inadvertently misled the public.

When she was in Opposition, Ms Rayner wrote letters to demand an ethics inquiry into Mr Sunak. She has also spoken out against tax avoidance over the past decade as an MP, once saying: “The public are furious with those who get away with tax avoidance while they pay.”

Dame Priti Patel, the shadow foreign secretary, said: “Angela Rayner is a hypocrite and a freeloader as she wants everyone else to pay higher taxes on family homes but doesn’t want to pay it herself.”

[Source: Daily Telegraph]