Rayner’s defence on stamp duty error ‘cannot withstand scrutiny’, Tories tell HMRC: UK Politics live

Bridget Phillipson has declined to say whether Angela Rayner should resign if she had been found to have breached ministerial standards.

Asked whether Ms Rayner should resign if the Prime Minister’s standards adviser found she had broken the rules, the Education Secretary told Times Radio: “I appreciate the answer I’m about to give will be frustrating, but there is a process, I’m not going to pre-judge it.

“It is right now that the independent adviser does his work and provides that outcome.”

The taxman must 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 HM Revenue and Customs (HMRC) calling for the tax authority to open a tax evasion investigation.

The letter said: “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?”

Stamp duty is a “confusing mess” according to one tax expert, after Housing Secretary Angela Rayner disclosed she had underpaid the tax on a seaside flat.

Stamp Duty Land Tax (SDLT) is a tax paid by the buyer of a UK residential property when the purchase price exceeds £125,000.

Posting on X, Dan Neidle, founder of Tax Policy Associates, said that in situations where people are buying a house and “everything is simple, you can ask your conveyancer how much stamp duty to pay”.

But he said that in complex situations “this is a very bad idea”.

Mr Neidle added: “The bigger point: stamp duty is a confusing mess. The tax shouldn’t exist. The second home surcharge is daft.

“Why are we taxing someone who buys two £500k homes £55k (£15k + £40k), But someone who buys one £1m home £43k? Where’s the logic?”

Angela Rayner admitted an underpayment of stamp duty on a seaside flat in Hove.

On Wednesday 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.

Downing Street insisted Sir Keir had full confidence in Angela Rayner, but declined to say whether he would sack her if she was found to have breached ministerial standards.

The Prime Minister’s spokesman said: “As you’d expect, we’re not going to get ahead of the process.

“As she’s set out in her statement today, she’s referred herself to the independent adviser. She will provide him with her fullest co-operation and access to all the information he requires.

“It is now up to the independent adviser to conduct that process.”

No 10 refused to say when the Prime Minister was informed about his deputy’s tax underpayment or whether he had seen the legal advice she had received.

Sir Keir believes Ms Rayner should “pay what is due”, his spokesman said.

Tory party chairman Kevin Hollinrake called for HMRC to open an investigation into Angela Rayner.

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?”