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Tuesday, Aug 09, 2022

Sir Keir Starmer: Rishi Sunak has 'very serious questions to answer' over wife's tax affairs after non-domicile status report

Sir Keir Starmer: Rishi Sunak has 'very serious questions to answer' over wife's tax affairs after non-domicile status report

Indian-born Ms Murty is the daughter of Narayana Murthy, the billionaire co-founder of tech giant Infosys - and has a 0.9% stake in the company worth hundreds of millions of pounds, according to its latest annual report.

Sir Keir Starmer has said Rishi Sunak has "very serious questions to answer" over his wife's tax affairs after a report she had claimed non-domicile status.

The Independent said that Mr Sunak's wife, Akshata Murty ,had used the status to save on her tax bill as recently as April 2020, when her husband was already in his position as chancellor.

Ms Murty's spokeswoman said she "has always and will continue to pay UK taxes on all her UK income".

Asked about the report on Thursday, Sir Keir told broadcasters it shows how "out of touch" the chancellor is.

"The chancellor has imposed tax rise after tax rise on working people. And he's said time and again there's no alternative, we've got no option," he said.

"If it now transpires that his wife has used schemes to reduce her own tax then that's breath-taking hypocrisy, and only goes to show it's more evidence of just how out of touch this chancellor is.

"And I think he's got very, very serious questions to answer in relation to these schemes."

'We need complete transparency'


Asked if Ms Murty should change her tax status, the Labour leader added: "We need complete transparency on this so that we can all understand what schemes she may have been using to reduce her own tax.

"But to use a scheme when the chancellor is out there day after day saying we need tax rises on millions of people in this country who are really, really struggling is breath-taking hypocrisy."

Meanwhile, shadow Treasury minister James Murray has today written to the chancellor asking for urgent answers, stating: "For our tax system to be effective and trusted, it needs to be built on fairness and consistency."

Indian-born Ms Murty is the daughter of Narayana Murthy, the billionaire co-founder of tech giant Infosys - and has a 0.9% stake in the company worth hundreds of millions of pounds according to its latest annual report.

Her spokeswoman said: "Akshata Murty is a citizen of India, the country of her birth and parent's home.

"India does not allow its citizens to hold the citizenship of another country simultaneously.

"So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes.

"She has always and will continue to pay UK taxes on all her UK income."

Some experts have questioned the assertion that the arrangement is required because Ms Murty is an Indian citizen.

Professor Richard Murphy, the Sheffield University academic who co-founded the Tax Justice Network, said being a non-dom is a "choice" she can relinquish.

"Domicile has nothing to do with a person's nationality," he said.

"In other words, the claims made in the statement issued by Ms Murty are wrong, and, as evidence, just because a person has Indian citizenship will never automatically grant them non-dom status in the UK."

Heather Self, tax partner at law firm Blick Rothenberg, told Sky News Ms Murty's Indian citizenship "doesn't have much to do with" being non-domicile in the UK.

"You can be a citizen of another country, it's a choice about where you want your home to be," she added.

Treasury 'aware of Ms Murty's tax status'


HMRC guidance on foreign income states that if you are non-domiciled and your foreign income is £2,000 or more, you have a choice to either pay UK tax on that income, or to claim what is known as "remittance basis" - which allows you to not pay tax in the UK on those foreign earnings.

Sky News understands that the Treasury was already aware of Ms Murty's tax status and that she pays foreign taxes on her foreign income.

Scrutiny of Ms Murty's financial affairs have intensified since the invasion of Ukraine as Infosys initially continued to have a presence in Russia - before later announcing that, like other multinationals, it was pulling out.

The Liberal Democrats have also urged Mr Sunak to legislate to close a loophole allowing ministers' spouses to be non-domiciled as current law states that MPs and members of the House of Lords cannot have non-domiciled status.

Liberal Democrat Treasury spokesperson Christine Jardine said: "The chancellor's household should be no different to the millions of UK households who now face the highest tax burden in decades. It's just nonsensical that someone can be domiciled in a different country to the person they live with.

"Rishi Sunak must put what's right above his own personal and selfish interests. He must take immediate action to close this loophole which leaves the door open for government ministers to exploit non-dom arrangements."

The latest revelations come on the same day as a YouGov poll showing the chancellor's popularity had plunged since his spring statement


'Slap in the face for struggling families'


Mr Sunak has bristled at the focus on his wife, telling the BBC last week that he found it "very upsetting" and comparing himself with actor Will Smith, who responded angrily when his wife was mocked during the Oscars ceremony.

Asked last month on Sky News whether his family was going against advice given to companies over connections with Russia, he said: "I'm an elected politician, and I'm here to talk to you about what I'm responsible for. My wife is not."

He said he had "nothing to do with that company".

Speaking to Sky News on Thursday, Business Secretary Kwasi Kwarteng defended Ms Murty's non-domiciled tax status.

"I'm totally comfortable with people having businesses, people operating what they do as private citizens, I'm completely comfortable about that," he said.

"I'm not an expert on her financial arrangements but I think absolutely people have a right to pursue their own business arrangements.

"I've just come here to say very clearly that I think her tax affairs are a matter for her."

Chancellor's popularity plunging


Boris Johnson later added: "It's very important in politics, if we possibly can, to try to keep peoples families out of it."

The latest revelations come on the same day as a YouGov poll showing the chancellor's popularity had plunged since his spring statement, taking his popularity below that of Sir Keir for the first time since he became leader.

Mr Sunak has been accused of not doing enough to tackle the cost of living crisis with energy and fuel prices soaring and the impact of the Ukraine war set to intensify the squeeze.

This week, Sky News revealed that the chancellor has donated more than £100,000 to his old boarding school Winchester College - one of the most expensive private schools in the country.

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