Angela Rayner may have to sell Hove flat after losing job

Angela Rayner could struggle to afford the mortgage on her £800,000 holiday home after having her salary heavily reduced, following her resignation from government office.

Ms Rayner also faces a hefty tax bill and possible “carelessness” penalty of more than £50,000 for failing to pay the correct stamp duty on the purchase of a flat that sparked her downfall.

In a further blow, Tories demanded she be stripped of her £16,876 severance payment owing to loss of office because in opposition she had voted to stop ministers under investigation getting a pay-off.

“If she has any integrity then surely she must decline any severance payment,” said Kevin Hollinrake, the Tory party chairman.

Ms Rayner’s salary will be cut from £161,409 to £93,904 – a drop of £67,505 – giving her little margin for error in making her monthly mortgage repayments.

Earlier this week, she admitted she had used her life savings to put a deposit down on the flat. She sold her 25 per cent stake in the family home in Ashton-under-Lyne in Great Manchester for £162,500 and used that to put down a £150,000 deposit on the Hove property.

Official documents show she has a £650,000 mortgage on the seaside flat through NatWest.

The scale of the loan will have left her with mortgage repayments as high as £4,000 a month while her salary against an income of £5,400 a month after tax. As deputy prime minister she was taking home £8,100.

Following her resignation, she will have just £1,400 a month left over with two teenage children to look after, covering food and clothing bills, gas and electricity, holidays and sundry other costs.

She also has a £40,000 tax bill to pay as well as a likely penalty of £12,000 plus interest on top of about £1,000 – a total bill of £53,000.

HMRC will have to decide if she should pay the excess for ‘carelessness’ in punishment for originally paying just £30,000 in stamp duty rather than £70,000 on the Hove flat.

Ms Rayner was found to have broken the ministerial code in failing to seek proper tax advice when buying the Hove flat, and HMRC will note in determining if she should pay the penalty.

Ms Rayner, 45, a mother-of-three, has also been stripped of her grace-and-favour flat in Admiralty House. She could rent a flat in London paid for through an MPs’ expenses but that will leave her with the Hove apartment to pay for, including expensive train fares to and from the capital.

One personal finance expert told The Telegraph that unexpected tax bills can often result in bankruptcy for those who received them.

The expert, who did not wish to be named, said: “One of the main reasons people get into financial difficulties, if you were to look specifically at people who have been made bankrupt, often it is a tax bill that will send them over the edge. It’s one of those things that people do fall foul of.”

There is no suggestion that Ms Rayner will be made bankrupt. But the expert said: “It is going to make life quite tough, and she’s going to have to make some changes in her life.”

She bought the flat in May this year for the asking price of £800,000. But property prices in Brighton and Hove fell 1.3 per cent over the last 12 months to July, according to Zoopla. That could make it very difficult for her to recoup the cost of the flat if she tried to now sell it.

Vandals who targeted the flat this week – on the back of revelations about her tax affairs – might also make it trickier to sell. The flat in Hove was targeted by vandals who spray painted “tax evader” on the walls outside the building.

Ms Rayner may now seek to boost her income through public speaking and other events as well as possibly a publishing deal. Her extraordinary back story – from being a single mother at 16 to rise to deputy prime minister – could result in a memoir which could easily outsell other political biographies.

Alternatively, Ms Rayner is among Labour politicians to have previously accepted donations for clothes from Lord Alli – worth £200m – and could turn to other donors for support now. Ms Rayner declared £3,550 worth of clothes from Lord Alli in November last year, before promising to stop accepting donations for her wardrobe.

She also faced criticism for using Lord Alli’s $2.5m Manhattan apartment for a holiday with her new partner, the former Labour MP Sam Tarry.

[Source: Daily Telegraph]