Rayner cleared of ‘wrongdoing or carelessness’ as she settles £40,000 SDLT bill

Former deputy prime minister Angela Rayner says she has settled a £40,000 bill for stamp duty land tax after being cleared by HMRC of deliberate wrongdoing or carelessness over her tax affairs.

In an interview with The Guardian newspaper, Rayner said an investigation by HMRC resulted in her settling the underpayment. HMRC said it was satisfied there was no tax avoidance and Rayner avoided paying a penalty.

The MP for Ashton-under-Lyne resigned in September of last year after she admitted underpaying stamp duty on an £800,000 flat. The underpayment arose as a result of the use of a trust as part of the purchase, which Rayner said she believed meant a lower rate of SDLT was applicable on the basis of written advice she had received.

A subsequent report by Sir Laurie Magnus CBE, independent adviser on ministerial standards, said Rayner could not “be considered to have met the ‘highest possible standards of proper conduct’ as envisaged by the [ministerial] code”.

He acknowledged she had been open about the existence of the trust at the centre of the controversy and considered that the firms advising her had appropriate knowledge and information surrounding its provisions. However, the written advice was qualified with the acknowledgement it did not constitute expert advice and a suggestion that specific tax advice should be obtained.

If such expert tax advice had been received earlier it would have advised her that a higher rate of SDLT was due, the investigation found.

At the time of the controversy, conveyancers said they felt they had been “thrown under the bus” by Rayner, with the firm acting on the purchase releasing a statement explaining it did not give tax or trust advice and based the stamp duty calculations on “HMRC’s own online calculator (using) the figures and the information provided by Ms Rayner”.

In the interview with The Guardian, Rayner said she had been “bruised” by the experience because of the intrusion into her disabled son’s personal life and because it had appeared as though she was “in it for myself” rather than on the side of ordinary people.

She explained: “That hurt the most, yeah, because that’s what I’ve always fought for.

“I felt that voters were left with the impression that I somehow tried to avoid – or worse had been reckless or careless – in my actions. Whereas now hopefully people can see that actually it’s a really complex area of law.”

The investigation had “clipped her wings”, she said, adding tax law in this area was “complex” and reiterating she did receive advice at the time. “Therefore I felt like I’d done everything I could to ensure that I complied,” she said.

In deciding to settle the underpayment, Rayner said she had consulted two “leading tax lawyers” who arrived at two different conclusions. One advised she would have a “realistic chance” of successfully appealing against the decision but warned it could take years.

“Politicians should be held up to high standards and that’s why, when there was a question mark, I resigned from government,” Rayner said. “I think that was the right thing to do.

“It was just the constant digging and then headlines of ‘I avoided tax’, ‘I didn’t want to pay the tax’, or that ‘I’d taken money from my son’, all these insinuations, all these things that were not accurate.

“I’m relieved because the one thing that has really upset me is that the public thought in some way that I had either been careless, or that I’d tried to avoid paying tax, when both of those things are clearly not right.”