Angela Rayner is fighting for her political future after admitting she failed to pay £40,000 in tax when purchasing a property.
After weeks of speculation about her property arrangements, the deputy prime minister conceded that she had not paid enough stamp duty on her £800,000 seaside flat in Hove, East Sussex.
In an emotional televised interview, Ms Rayner, who is also the housing secretary, said she had been “in shock” and “devastated” over the fallout. She insisted it was not a “tax dodge” and blamed the underpayment “mistake” on incorrect legal advice.
She told Sky News: “I’ve been in shock, really, because I thought I’d done everything properly, and I relied on the advice that I received and I’m devastated because I’ve always upheld the rules and always have done.
“And always felt proud to do that. I feel, you know, that it is devastating for me.”
Asked if she had considered resigning, she said she had “spoken to my family about it”.
Ms Rayner referred herself to the prime minister’s independent ethics adviser, who will interview her over the property purchase in the coming days as part of an investigation into the scandal.
At PMQs, Sir Keir Starmer backed Ms Rayner, saying he was “very proud to sit alongside” her, and praised her decision to refer herself to the independent ethics adviser.
But Tory leader Kemi Badenoch said the prime minister should sack his deputy.
She added: “I remember when the prime minister said tax evasion is a criminal offence, and should be treated as all other fraud. If he had a backbone he would sack her.”
Ms Rayner spoke out hours after a court order was lifted which had prevented her from disclosing information about her property arrangements.
She had been under pressure after it was reported that she had saved £40,000 in stamp duty on the property by removing her name from the deeds of a family home in her Ashton-under-Lyne constituency, classifying the Hove flat as her only property despite still spending time at the family house.
In Wednesday’s statement, she said she had taken legal advice when she bought the south coast flat, which suggested she was “liable to pay standard stamp duty”, but had then sought “further advice from a leading tax counsel” after headlines about the arrangement.
She learned that the initial advice had been inaccurate and she was liable to pay additional stamp duty.
That is because she had put her stake in her constituency home in Ashton into a trust set up in 2020 for her disabled son, she said.
Tax experts said the Hove property could not be treated as her only residence because of the nature of the trust.
She told Sky’s Electoral Dysfunction podcast: “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.
“I’m prepared to pay that and fully comply with the HMRC as well,” she added.
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”.
She set out how she had a court order against answering questions over her tax affairs sooner, relating to her 2023 divorce.
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.”
Sir Keir said in the Commons: “She has explained her personal circumstances in detail. She’s gone over and above in setting out the details including, Mr Speaker, yesterday afternoon, asking a court to lift a confidentiality order in relation to her own son.
“I know from speaking at length to the deputy prime minister just how difficult that decision was for her. But she did it to ensure that all information is in the public domain.
“She has now referred herself to the independent adviser. That is the right thing to do.”
But 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”.
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.”
Reform UK deputy leader Richard Tice told Sky News: “She was so vocal in attacking opposing politicians when she was in opposition that she can’t stand up and say ‘I’m the biggest hypocrite in the land’. She has to offer her resignation to the prime minister.”
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.”
Labour backbenchers appeared uncertain whether Ms Rayner would be able to survive in her current position, with several saying it would depend on the outcome of Sir Laurie Magnus’s investigation.
But some added that they hoped she would be able to continue, with one saying she was “doing a good job and everyone recognises she brings a perspective we need to the top team”.
