Tories call for HMRC investigation into Angela Rayner stamp duty scandal

The Conservatives have called on HMRC to launch an investigation into whether Angela Rayner has evaded tax after she admitted an underpayment of stamp duty on a seaside flat, the Conservatives have said.

Deputy Prime Minister Ms Rayner’s explanation that she was given inaccurate legal advice “cannot withstand scrutiny”, Tory party chairman Kevin Hollinrake said in a letter to HMRC, calling for it to open a tax evasion investigation.

The Conservatives called for the probe after Sir Keir Starmer backed his deputy at Prime Minister’s Questions, and insisted he was “very proud to sit alongside” her.

Ms Rayner referred herself to the Prime Minister’s independent ethics adviser after admitting she underpaid tax, something the PM described as “the right thing to do”.

She has also said she is “working with expert lawyers and with HMRC to resolve the matter and pay what is due”.

The Deputy Prime Minister, who is also the Housing Secretary, said she had received inaccurate legal advice that led her to underpay tax when buying a flat in Hove in May.

She has been under pressure after media reports claimed she saved £40,000 in stamp duty on the property because she removed 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.

“This contention of innocent reliance on defective advice cannot withstand scrutiny,” Mr Hollinrake said in his letter to HMRC.

The letter, which has been shared with Sir Laurie Magnus, the Prime Minister’s independent ethics adviser, added: “I am requesting that HMRC undertake a full investigation into this matter and consider the application of a penalty for tax evasion.

“I note that HMRC guidance on this issue recommends a penalty based on Potential Lost Revenue, of 30% of the revenue for an ‘careless’ inaccuracy (which would be £12,000), to 100% (£40,000) for a deliberate inaccuracy.

“You may wish to obtain a copy of the ‘advice’ that she claims to have had, inspect her multiple title deeds on the Land Registry, and obtain a copy of the declaration of trust from 2023. Was this ‘advice’ actually from a tax lawyer or chartered tax adviser?”

In a statement on Wednesday, Ms Rayner 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.

Tax experts said the Hove property could not be treated as her only residence because of the nature of the trust.

Tory leader Kemi Badenoch called for the Deputy Prime Minister to be sacked amid accusations of hypocrisy as ministers may be considering property tax rises in the autumn Budget.

Reform leader Nigel Farage suggested it was “more likely than not” Ms Rayner would resign this week, and speaking from the USA told GB News: “I just don’t see how you survive this.”

In the Commons, Sir Keir gave his backing to Ms Rayner, telling MPs: “She has explained her personal circumstances in detail. She’s gone over and above in setting out the details including yesterday afternoon asking a court to lift a confidentiality order in relation to her own son.”

He added: “But I can be clear, I am very proud to sit alongside a Deputy Prime Minister who is building 1.5 million homes, who is bringing the biggest upgrade to workers’ rights for generations, and who has come from a working-class background to become Deputy Prime Minister.”

Science Secretary Peter Kyle told LBC that Ms Rayner was “being treated very differently” because she was from a working class background.

He added: “Just because it is Angela, with her accent and her background, people are treating her in a way they wouldn’t, that if a Tory MP who was born in wealth had a second home, which many of them do already.”