News Item: ‘Non-dom’ tax status for UK minister fuels attacks on govt
Britain’s beleaguered finance minister won fulsome backing from a cabinet colleague on Sunday but revelations about the past tax status of another minister gave new ammunition to government critics.
Policing minister Kit Malthouse denied that Chancellor of the Exchequer Rishi Sunak’s political career was doomed after it emerged that his Indian wife benefits from “non-domicile” tax status.
Akshata Murty, whose father co-founded the IT behemoth Infosys, said last Friday she would in future pay UK taxes on all her global income, after 48 hours of controversy that has still not dimmed.
After announcing a budget that was widely criticised for doing little to help hard-pressed Britons, Sunak is seeing his once-rosy prospects of succeeding Prime Minister Boris Johnson ebb rapidly.
“Rishi Sunak has been a remarkable force for good in this country over the last two years,” Malthouse told Sky News, highlighting Sunak’s financial support packages during the coronavirus pandemic.
“He is a smart, clever, committed politician who came into parliament with me (in 2015) and I have been deeply impressed by him ever since. I’m a big fan.”
Sunak stands accused of hypocrisy for raising taxes on Britons in the middle of a cost-of-living crisis, while his own family has seen millions of pounds in Infosys dividends shielded from his own Exchequer.
– Green Card –
Sunak has also been criticised for a lack of transparency, after he admitted to holding a “Green Card” for US permanent residents until last year.
Possession of the card would oblige Sunak to keep the United States as his long-term home and pay US taxes, despite serving as Britain’s second-most powerful politician with designs on Johnson’s job.
The Independent newspaper meanwhile said that Sunak was listed as the beneficiary of offshore trusts set up in the British Virgin Islands and Cayman Islands to help manage his wife’s tax and business affairs.
Yvette Cooper, a frontbench MP for the opposition Labour party, said of Sunak, “I think that ethics do matter when you’re in government, particularly as there may be a conflict of interest here as well.”
She demanded clarity from Sunak about the offshore trusts and about why he retained a Green Card years after working and studying in the United States, where he met Murty.
The couple often go back to their California home with their children but Malthouse told BBC television that it was a “pretty rotten insinuation” to suggest that Sunak was not wholly committed to Britain.
Sajid Javid, Sunak’s predecessor as chancellor, revealed meanwhile that he had also obtained “non-dom” status between 2000 and 2006, during a lucrative career in banking before he entered politics.
Javid, who is now Johnson’s health secretary, worked in New York in the 1990s and in Singapore from 2007 to 2009. He made the tax admission after an investigation by the Sunday Times newspaper.
Some of his investments were placed in an “entirely legitimate” offshore trust but he relinquished the arrangement, at considerable cost, when he became a government minister in 2012, Javid said.
One of Sunak’s recent tax hikes was a levy for elderly social care. Last week, Javid said it would be “morally wrong” not to impose the levy.
– ‘One rule for them’ –
“The hypocrisy stinks,” Labour’s shadow health spokesman Wes Streeting said about Javid, as the party redoubled its attacks ahead of UK-wide local elections on May 5.
“When it comes to Tories hiking up taxes on working people, it seems it’s one rule for them and another for the rest of us,” he said.
The Sunday Times also reported that Sunak had come close to resigning last week and that his family had moved out of Downing Street to one of their London properties.
The government is meanwhile looking at a leak investigation into how Murty’s tax status became public. Such probes are something of a Whitehall ritual, rarely getting to the bottom of a leak.
But the Sunday Times quoted one senior official as saying, “Divulging the tax status of a private individual is a criminal offence.”
Sunak gave Johnson only lukewarm support when the prime minister first start fighting revelations about parties held in Downing Street during pandemic lockdowns.
Johnson on Friday denied knowledge of any briefing war by his team against Sunak and told reporters that his chancellor was doing an “absolutely outstanding job”.